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  5. HMM.A: Can you provide your latest opinion on this company as well as analysis of their balance sheet. [Hammond Manufacturing Company Limited Class A Subordinate Voting Shares]
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Investment Q&A

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Q: Can you provide your latest opinion on this company as well as analysis of their balance sheet. debt, cash flow, pe, expected growth,risks etc?
Technically it is breaking out.
Looking at taking a small position in a TFSA .

Thanks very much
Asked by Thomas on January 29, 2024
5i Research Answer:

HMM.A is a sister company with HPS.A before being spun out separately, and both businesses experienced neat-term tailwinds in demands for their electrical equipment products. HMM.A is now trading at 6.5x times' P/E. In the last five years, revenue growth was solid around 11% coming mainly from organic growth and internal reinvestment. The balance sheet is okay, with net debt of $53M and net debt/EBITDA of around 1.5x. The company has been reinvesting back heavily to expand production capacity in the last few years. Overall, a decent company with great momentum, still trading at a cheap valuation while achieving double-digit growth on average in the last five years. We would be comfortable owning some at the current price while being mindful of the company's size risk. It has been mentioned numerous times by some hedge funds in the past month or so and interest has picked up. But it could go quiet as well if these funds stop discussing it.