HSOA – Q1 2007 Earnings

By: ispeculatornew
Date posted: 05.12.2007 (12:00 am) | Write a Comment  (0 Comments)

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HSOA – Home Solutions of America (Nasdaq) (Closing Price – $5.54)

On May 11, Home Solutions of America announced very good first quarter results. They also gave guidance for higher revenues and earnings in the second quarter.

Home Solutions reported revenue of 39.9 million and earnings per diluted share of 0.12 in the first quarter of 07. Both of these numbers were improvements sequentially and year over year. For the second quarter they gave guidance for revenues between 44-48 million and earnings between 0.14-0.17 per diluted share.

The CEO of Home Solutions said the “results reflect our ability to successfully address several of the operational issued that adversely impacted our 2006 fourth quarter results and to integrate the Fireline and Associated Contractors acquisitions.” With the operational issues taken care of and the seasonally slower first quarter complete, Home Solutions should start to post better results. This is evidenced by the guidance for higher revenues and earnings in the second quarter.

There are many other potential positive catalysts for Home Solutions of America. Hurricane season is approaching and the stock price will benefit if any hurricanes make landfall in the Gulf Coast Area. Home Solutions could win some projects related to the rebuilding of New Orleans. Also, the stock is still being heavily shorted and improved results or other positive developments will force the shorts to cover at some point.

In my opinion Home Solutions is still a good speculative investment and I would recommend that you consider buying or adding to your position. I do want to disclose that I did sell my position a few weeks ago to buy a couple of my other recommendations (SWIR and MCZ). This isn’t a bad reflection of HSOA but rather my misfortune of only having a limited amount of funds and seeing opportunity elsewhere. I still like HSOA and will probably buy back in when I get more money.

Disclosure: I currently have no position in  HSOA.

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