HAMMOND POWER SOLUTIONS INC (HPS-A.TO)

I am putting HPS-A.TO on my watching list (market cap $58 million), mostly due to its very strong financial results in the last few quarters. The stock has run up quite a bit and I am a bit cautious here and looking for a better entry point. Other than financial, I am also concerned with its cyclicality nature of its business, and low liquidity. Having said that the company delivered a blowout quarter a few weeks ago. Revenues up 35.1%, EPS up by 100% (0.16 vs 0.08) and EBITDA up by 56% this quarter. YTD, revenues up by 33.2%, EPS up by 80.9% to 0.38. backlog increased by 31.7%. Valuation is also reasonable. I expect it to make 0.54-0.55 this year, which will result in a multiple less than 10X. Results for the past quarters are also very impressive.

Position: None