Author Topic: Is HAWK a good stock investment?  (Read 5634 times)

Zach

  • Administrator
  • Hero Member
  • *****
  • Posts: 622
    • View Profile
    • Email
Is HAWK a good stock investment?
« on: April 22, 2013, 07:39:21 PM »
I have been a long-time follower of Blackhawk Network, the company that has pretty much a monopoly on the retailer gift card kiosks in all of the grocery stores and drug stores.

I think the company has great growth potential, but was wondering what others think of the stock thus far with their recent IPO?

Ticket symbol: HAWK

rawraw

  • Hero Member
  • *****
  • Posts: 2795
    • View Profile
Re: Is HAWK a good stock investment?
« Reply #1 on: April 23, 2013, 06:21:13 AM »
It is trading at a 28PE.  It would need some fairly high growth for me to invest.  And something happened the most recent year that raised their costs.  I'd want to know what that was.


[attachment deleted by admin]

Zach

  • Administrator
  • Hero Member
  • *****
  • Posts: 622
    • View Profile
    • Email
Re: Is HAWK a good stock investment?
« Reply #2 on: April 23, 2013, 08:45:39 AM »
Thanks for the input. What factors other than the PE ratio do you consider most important when you evaluate your potential investments?

rawraw

  • Hero Member
  • *****
  • Posts: 2795
    • View Profile
Re: Is HAWK a good stock investment?
« Reply #3 on: April 23, 2013, 10:09:24 AM »
I don't rely on PE, it's just an easy metric that approximates value. I personally do discounted cash flow models with a margin of safety and sensitivity analysis on growth and discount rate assumptions. I'd also of course read all the recent 10ks.

After that I'd read market research from probably morning star if available. Try to Guage what is currently priced in
« Last Edit: April 23, 2013, 10:10:55 AM by rawraw »

Fred

  • Hero Member
  • *****
  • Posts: 1421
    • View Profile
Re: Is HAWK a good stock investment?
« Reply #4 on: April 23, 2013, 12:41:16 PM »
Net Profit Margin (TTM) of 5% is a bit too low, compared to industry and sector.

http://www.reuters.com/finance/stocks/financialHighlights?symbol=HAWK.O

Zach

  • Administrator
  • Hero Member
  • *****
  • Posts: 622
    • View Profile
    • Email
Re: Is HAWK a good stock investment?
« Reply #5 on: April 23, 2013, 03:50:18 PM »
Net Profit Margin (TTM) of 5% is a bit too low, compared to industry and sector.

http://www.reuters.com/finance/stocks/financialHighlights?symbol=HAWK.O

There's not too much competition to compare too...any displayed competition is probably not 'real' competition. Gift cards in general are fairly low margin on the selling side, as they do.

I appreciate any input.

rawraw

  • Hero Member
  • *****
  • Posts: 2795
    • View Profile
Re: Is HAWK a good stock investment?
« Reply #6 on: April 23, 2013, 03:51:47 PM »

If that spike in expenses isn't recurring, there margins could be under reported

Fred

  • Hero Member
  • *****
  • Posts: 1421
    • View Profile
Re: Is HAWK a good stock investment?
« Reply #7 on: April 23, 2013, 04:02:11 PM »
The Gross Margin (TTM) is actually very healthy.  So, something expensive is happening in between Gross and Net.

ee1x

  • Full Member
  • ***
  • Posts: 124
    • View Profile
    • Email
Re: Is HAWK a good stock investment?
« Reply #8 on: April 23, 2013, 05:15:06 PM »
Wouldn't want to invest in gift cards personally. I hate receiving them, I hate giving them. Seems thoughtless. And with a 27 PE I think this is a highly speculative play.
Investing since March 2012