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My scope is to assist private companies both abroad and domestic wishing to go public in the U.S. We invest in the company in the earliest stages, and assist in coordinating their audit, legal RTO or IPO. We also offer M&A identification, execution and consulting, Investors relations... More
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  • Should You Seek Aid From This Technology Consultant? 0 comments
    Jan 4, 2014 8:25 AM | about stocks: HCKT

    Knowing how to maximize your business is an invaluable tool for future success. This applies to small sole proprietors and even large Fortune 500 companies. When a business needs help developing a plan or making the business more efficient, they turn to consultants. These consultants help integrate a new plan into the business to provide more revenue sources, better communication, and efficiency. Some consulting firms have their place, but by no means can they are be considered the same.

    The stock I will be talking about today is a consulting firm that specializes in strategic advisory and technology and "the company offers executive advisory programs, benchmarking, business transformation, and technology consulting services, with corresponding offshore support" (finviz). I am referring to The Hackett Group, Inc. (NASDAQ: HCKT).

    Turning to the fundamentals, The Hackett Group has a market cap of $173.04 million and is currently rated a "buy" from analysts. Price to earnings is at 12.56 and forward price to earnings is at 11.95. PEG is undervalued at .84, price to sales is undervalued at .76, price to book is at 1.64, price to cash of 11.61, and price to free cash flow of 13.52. The consulting firm has a total debt to equity of .14 and cash per share of .49. Since all the debt is classified as long-term, this gives the company a stable current ratio of 2.20. Earnings are expected to fall 3.8 percent this year, rise 10.77 percent next year, and rise 15 percent over the next five years. Management efficiency is decent with a return on assets of 9.5 percent, return on equity of 14.5 percent, and return on investment of 14.5 percent. Margins, however do need work with gross margin of 31.6 percent, operating margin of 7.7 percent, and profit margin of 6.2 percent. It is also important to note that The Hackett Group pays a dividend of 1.77 percent.

    The stock certainly has its positives such as undervalued valuation ratios, decent dividend, and earnings growth. However, consulting services are very economically sensitive and should be looked at with caution. Consulting fees are classified as capital expenditures and those are often the first expenses a corporation cuts when the economy turns lower. Investors need to take that into consideration and view The Hackett Group as a watch list security. In recent weeks, the stock has begun to turn lower and is currently in pullback mode. Also, keep in mind that the market is up nicely this year and a more significant correction is easily in the cards for next year.

    Stocks: HCKT
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