HHG
CyclicalsValuation Breakdown
Cyclical companies (chemicals, oil & gas, basic resources) have earnings that swing dramatically with commodity prices and economic cycles. Valuing them on a single year's earnings is misleading: they look cheap at peaks and expensive at troughs. This model uses 7-year median EBITDA ("mid-cycle" earnings) and a 7-year median EV/EBITDA multiple to estimate what the firm is worth at a normal point in the cycle.
Valuation Track Record
Retroactive intrinsic value vs actual close price — HHG
Earnings Quality
Fiscal year 2025
Financial Forensics
Beneish M-Score · 2019
The Beneish M-Score of -3.2185 indicates a low likelihood of earnings manipulation, as it is well below the threshold of -1.78. However, the earnings quality metrics reveal significant weaknesses, particularly in revenue and margin quality, which could pose risks to future performance.
- Earnings Quality Score of 62.0/100, with eq_margin and eq_revenue both at 0.0/100, indicating severe issues in profitability and revenue recognition.
- DSRI at 1.2084 suggests potential issues with inventory management relative to sales, which could indicate overstatement of revenues.
- High cash conversion rate of 100.0/100 in eq_cash_conv, indicating strong ability to convert earnings into cash.
- Low SGI of 0.8481 suggests that the company is not aggressively expanding, which may reduce the risk of overextension.
The ownership structure is fragmented with no single shareholder holding a significant stake, which may lead to governance challenges and potential conflicts of interest.
Investors should closely monitor the company's revenue recognition practices and profitability metrics. Consider a cautious approach to investment until improvements in earnings quality and governance are evident.
Generated by AI based on quantitative data. Not financial advice.
Quantitative Scores
Key Ratios
Company Overview
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> mapping common ownership for HHG — hover nodes for intel, click to navigate