Latest news with #HLMN
Yahoo
22-05-2025
- Business
- Yahoo
1 Industrials Stock with Solid Fundamentals and 2 to Turn Down
Even if they go mostly unnoticed, industrial businesses are the backbone of our country. Unfortunately, this role also comes with a demand profile tethered to the ebbs and flows of the broader economy, and investors seem to be forecasting a downturn - over the past six months, the industry has pulled back by 11.4%. This performance was worse than the S&P 500's 2.1% loss. Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Taking that into account, here is one industrials stock poised to generate sustainable market-beating returns and two we're steering clear of. Market Cap: $9.54 billion Credited with the invention of the glass-lined water heater, A.O. Smith (NYSE:AOS) manufactures water heating and treatment products for various industries. Why Are We Wary of AOS? Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth Demand will likely be soft over the next 12 months as Wall Street's estimates imply tepid growth of 2.8% Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 7.5 percentage points At $67.12 per share, A. O. Smith trades at 17.4x forward P/E. Dive into our free research report to see why there are better opportunities than AOS. Market Cap: $1.47 billion Established when Max Hillman purchased a franchise operation, Hillman (NASDAQ:HLMN) designs, manufactures, and sells industrial equipment and systems for various sectors. Why Does HLMN Give Us Pause? Sales stagnated over the last two years and signal the need for new growth strategies Poor expense management has led to an operating margin of 3.7% that is below the industry average Underwhelming 4% return on capital reflects management's difficulties in finding profitable growth opportunities Hillman's stock price of $7.51 implies a valuation ratio of 13.1x forward P/E. Read our free research report to see why you should think twice about including HLMN in your portfolio, it's free. Market Cap: $50.63 billion Operating a network of municipal solid waste landfills in the U.S. and Canada, Waste Connections (NYSE:WCN) is North America's third-largest waste management company providing collection, disposal, and recycling services. Why Is WCN Interesting? Annual revenue growth of 10.5% over the past five years was outstanding, reflecting market share gains this cycle Operating margin expanded by 4.1 percentage points over the last five years as it scaled and became more efficient Robust free cash flow margin of 15.2% gives it many options for capital deployment Waste Connections is trading at $195.93 per share, or 36.2x forward P/E. Is now a good time to buy? Find out in our full research report, it's free. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
Yahoo
13-05-2025
- Business
- Yahoo
HLMN Q1 Earnings Call: Tariffs and Supply Chain Strategy Take Center Stage
Hardware products and merchandising solutions provider Hillman (NASDAQ:HLMN) missed Wall Street's revenue expectations in Q1 CY2025 as sales rose 2.6% year on year to $359.3 million. On the other hand, the company's full-year revenue guidance of $1.54 billion at the midpoint came in 0.5% above analysts' estimates. Its non-GAAP profit of $0.10 per share was in line with analysts' consensus estimates. Is now the time to buy HLMN? Find out in our full research report (it's free). Revenue: $359.3 million vs analyst estimates of $361.3 million (2.6% year-on-year growth, 0.5% miss) Adjusted EPS: $0.10 vs analyst estimates of $0.10 (in line) Adjusted EBITDA: $54.53 million vs analyst estimates of $54.15 million (15.2% margin, 0.7% beat) The company reconfirmed its revenue guidance for the full year of $1.54 billion at the midpoint EBITDA guidance for the full year is $265 million at the midpoint, above analyst estimates of $261.9 million Operating Margin: 4.2%, in line with the same quarter last year Free Cash Flow was -$21.31 million compared to -$6.08 million in the same quarter last year Market Capitalization: $1.66 billion Hillman's first quarter results reflected execution in a challenging environment, with the company attributing its performance to new business wins and contributions from its recent Intex acquisition. Management discussed how the rollout of MinuteKey 3.5 machines and the strength of the Hardware and Protective Solutions segment offset weakness in the Canadian business, which faced macroeconomic and retail headwinds. CEO Jon Michael Adinolfi emphasized the company's resilience, noting, 'We have successfully managed through multiple market cycles and this business has proven resilient time and time again.' Looking ahead, management reaffirmed its full-year guidance, citing confidence in price increases to offset the impact of new tariffs. The leadership team described ongoing efforts to diversify the supply chain and reduce reliance on Chinese suppliers, as well as proactive engagement with customers around pricing. CFO Rocky Kraft acknowledged the near-term pressure on volumes and margins due to tariff costs, but maintained that guidance is intentionally conservative given the uncertainty. The company expects to see the full impact of pricing actions and tariffs reflected in financial results by the third and fourth quarters. Hillman's management focused on the significant impact of new tariffs, supply chain strategy, and the integration of recent acquisitions on the quarter's performance. The team outlined how proactive pricing and supplier diversification are central to navigating current external pressures. Tariff Impact and Mitigation: Management disclosed that new 2025 tariffs affect roughly one-third of Hillman's products, estimating an annualized impact of $250 million. The company's strategy is to implement dollar-for-dollar price increases to offset these costs, mirroring its approach during previous tariff cycles. Supplier Diversification: The ongoing Dual Faucet strategy aims to reduce reliance on China to about 20% of overall sourcing by year-end. Management highlighted efforts to shift production to Southeast Asia and India to minimize tariff exposure and maintain supply chain flexibility. Intex Acquisition Contribution: The Intex acquisition provided approximately four points of growth in the quarter, supporting top-line results. Management noted that integration efforts are ongoing and expected to improve margins as synergies are realized. MinuteKey 3.5 Rollout: The Robotics and Digital Solutions segment returned to growth, with over 1,700 MinuteKey 3.5 machines now deployed. Management expects this rollout to continue driving segment performance through 2026. Canadian Market Weakness: Net sales in Canada declined nearly 19% due to lower home sales and macro uncertainty. Management remains confident in the segment's long-term prospects, citing strong retail partnerships and market share. Management's outlook for the remainder of the year is shaped by tariff-related pricing actions, supply chain adjustments, and the pace of margin recovery, while recognizing risks from consumer demand and ongoing macroeconomic pressures. Tariff Pricing Pass-Through: The company's ability to implement price increases to fully offset additional tariff costs is expected to be the primary driver of revenue and profit stabilization in the second half of the year. Supply Chain Diversification: Further progress in shifting sourcing away from China is central to Hillman's strategy for mitigating long-term tariff risk and maintaining cost competitiveness. Volume and Margin Pressure: Management cautioned that price increases may dampen market volumes, and that adjusted gross margins could remain below historical rates if tariffs persist. The full benefit of price actions is not expected to be realized until the third and fourth quarters. Lee Jagoda (CJS Securities): Asked about incremental margins in the RDS segment and impact from the MinuteKey rollout; management expects margins to improve and return to historical levels as growth accelerates later in the year. Anika Dholakia (Barclays Investment Bank): Inquired about the significant volume decline assumption in the second half; CFO Rocky Kraft described the guidance as conservative, reflecting unprecedented market conditions due to tariffs. Stephen Volkmann (Jefferies): Sought clarification on the timing and structural impact of tariffs on margins; management expects tariff-related margin compression to be lasting unless tariffs are reversed. David Manthey (Baird): Questioned how current supply chain conditions compare to the COVID disruption; CEO Adinolfi stated that service levels are strong and disruptions are minimal compared to prior years. Reuben Garner (Benchmark): Explored product categories still sourced from China and price elasticity; management indicated that core fastening and gloves remain exposed but are actively being diversified to reduce tariff impact. In the quarters ahead, the StockStory team will be closely monitoring (1) the pace and effectiveness of tariff-related price increases on both customer retention and market volumes, (2) the company's progress in reducing sourcing from China and integrating new supply partners, and (3) the realization of expected margin improvements from the Intex acquisition and MinuteKey 3.5 rollout. The timing and impact of tariff pass-through on both top and bottom lines will be essential to evaluate. Hillman currently trades at a forward P/E ratio of 14.9×. Is the company at an inflection point that warrants a buy or sell? See for yourself in our free research report. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
Yahoo
31-03-2025
- Business
- Yahoo
3 Reasons HLMN is Risky and 1 Stock to Buy Instead
Over the last six months, Hillman shares have sunk to $8.52, producing a disappointing 19.3% loss - worse than the S&P 500's 4.1% drop. This may have investors wondering how to approach the situation. Is there a buying opportunity in Hillman, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it's free. Despite the more favorable entry price, we're swiping left on Hillman for now. Here are three reasons why there are better opportunities than HLMN and a stock we'd rather own. Established when Max Hillman purchased a franchise operation, Hillman (NASDAQ:HLMN) designs, manufactures, and sells industrial equipment and systems for various sectors. Examining a company's long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Hillman's 3.9% annualized revenue growth over the last five years was sluggish. This fell short of our benchmark for the industrials sector. Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes. Hillman was profitable over the last five years but held back by its large cost base. Its average operating margin of 3.7% was weak for an industrials business. This result is surprising given its high gross margin as a starting point. Growth gives us insight into a company's long-term potential, but how capital-efficient was that growth? A company's ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity). Hillman historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 4.4%, lower than the typical cost of capital (how much it costs to raise money) for industrials companies. Hillman isn't a terrible business, but it doesn't pass our bar. After the recent drawdown, the stock trades at 15.5× forward price-to-earnings (or $8.52 per share). This valuation multiple is fair, but we don't have much faith in the company. We're fairly confident there are better investments elsewhere. We'd suggest looking at a fast-growing restaurant franchise with an A+ ranch dressing sauce. The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we're here to help you pick them. Get started by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
