HSOA – Hold Recommendation

By: ispeculatornew
Date posted: 03.05.2007 (12:00 am) | Write a Comment  (0 Comments)

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HSOA – Home Solutions of America (Nasdaq) (Closing Price – $4.91)

Home Solutions of America today lowered guidance for 2006 to 0.43-0.46 per share from previously announce guidance of 0.56-0.60 cents per share. The company said the lowered guidance was due to a weak remodeling and rebuilding sector and delays in government spending for New Orleans. The stock price took quite a hit but I would recommend to continue holding your shares.

Even with the lowered guidance HSOA is still trading at a very low trailing PE (4.91/0.43 = 11). Also, the stock market is forward looking so the guidance for the current year is a lot less important than the guidance for next year. HSOA plans to announce the fourth quarter results and the outlook for 2007 on March 15. If HSOA guides for higher revenues and earnings in 2007 I think the stock price will make a quick rebound.

I am going to change my recommendation to hold until guidance for 2007 is given.

Disclosure: I currently own shares of HSOA.

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