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Why Hawkins (HWKN) is a $60 Stock, and Soon!

Last April, when Hawkins (NASDAQ:HWKN) was trading at $27+, I wrote an instablog headlined, "Hawkins (HWKN) is a $40 Stock, and Soon!".  HWKN passed that price threshold in mid-November, now trades at $44 -- and a year later I am back with a $60 price target. 

The Hawkins story is more exciting than ever:

History of Growth and Profitability -- As I said last year, HWKN is no fly-by-night operation, the Company was founded more than 75 years ago, and has paid a cash dividend for more than 20 years

Strong Balance Sheet -- At the end of the previous quarter, HWKN had approximately $60 million of cash and equivalents; a little less than half of that money was used for the acquisition described below, but HWKN's balance sheet is still rock solid

Consolidation Opportunity -- Earlier in 2011, Hawkins acquired Vertex Chemical, a manufacture and distributor of sodium hypochlorite.  This acquisition expands HWKN's footpring and is emblematic of the consolidation opportunity for Hawkins, increasing the Company's growth rate

Improved Trading Volumes -- For many years HWKN was very thinly traded, but recently trading volumes have improved and the stock often trades more than 50,000 shares in a day, a level worthy of institutional buying

Large (and Volatile) Short Position -- There is a 500,000 share short position in HWKN, a bullish signal

Limited Research Coverage and Visibility -- While Motley Fool and other research services have noted HWKN's attractiveness, to my knowledge there is no active sell side research coverage of HWKN

Hawkins is a fun stock to own because NOBODY HAS EVER HEARD OF THIS COMPANY but its stock price goes up, up, up.  Don't be surprised if I am back here a year from now writing an instablog headlined, "Hawkins (HWKN) is an $80 stock -- and Soon!"

Vertrinsic