Hansen (HSN) looks cheap

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Question asked 11/09/2021

Hansen (HSN) looks cheap

Hi James - 2 ASX companies i am considering adding to my portfolio 1. HEXAGON ENERGY MATERIALS LIMITED 2. HANSEN TECHNOLOGIES LIMITED Hansen seems cheap after its recent fall due to a failed takeover bid- not sure if the failed takeover is a negative on what they found or justification of a higher price. Hexagon is more of a speculative play based on higher energy prices. Regards Michael - From Byron Bay

Answer

Hi Michael – We had a call with Hansen after the bid was pulled and they were strong in saying that no untoward issues were the cause. HSN recently posted a strong FY21 result and they also reconfirmed their FY25 target of $500m revenue. It does looks cheap here, on less than 15x forecast EV/EBITDA – my only concern is that markets often take it as a negative when bidders walk away and we’d like it more around ~$5, or ~10% lower to provide better risk/reward.

In terms of Hexagon Energy (HXG), I’m not familiar with this ~$35m energy business.

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Hanson Technologies (HSN)

LAST UPDATED 11/09/2021 08:21

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