HLMN - Hillman Solutions: Buoyant In A Bad Housing Market
2024-02-26 04:39:30 ET
Summary
- Hillman Solutions' wide competitive moat allowed it to generate strong free cash flows, improve margins, and strengthen the balance sheet in 2023.
- Sales were relatively flat despite weak store traffic at customers' retail stores as the company won new business to offset the declines.
- While 2024 may be another challenging year for the industry, HLMN is expected to increase margins and use tuck-in acquisitions to counter expected price givebacks.
- The company is poised to benefit greatly from the eventual recovery in existing home sales.
- HLMN stock is undervalued, creating a margin of safety for investors.
Investment Thesis
I last covered Hillman Solutions ( HLMN ) in late 2022 in an article highlighting the company's response to post-COVID supply chain disruptions, strengthening Hillman's competitive moat . During 2023, the company realized its goal of returning inventories to normalized levels, realized the benefits of price increases that offset cost pressures, and won new business. As a result, the company maintained sales and improved its balance sheet despite declining traffic at its customers' stores....
Hillman Solutions: Buoyant In A Bad Housing Market