(I know I know. So annoying but…) CAPS Pick: Heska Corp (HSKA)
December 17, 2010 § 3 Comments
Sorry for all the recent CAPS picks, but I am trying to populate the page and I don’t want to leave any of em untalked about. So it means a bunch of mini posts.
But let’s get down to business. My pick today is Heska Corp. They make vet products, like heartworm tests and lab equipment so that Fluffy and Mittens can live happy, productive lives. I picked it for CAPS because:
1. It’s at half book value
2. Their CROIC is pretty sweet at almost 19%. (CROIC stands for Cash Return on Invested Capital. So in this instance that means that for every dollar they borrow, they make 19% on it. If you borrowed a buck and made a $1.19 I’d totally let you take me to lunch, you genius you.)
3. Although they’ve had bad margins, they have stabilized these past 2 years. Let’s hope that trend continues. Same with Free Cash Flow. Now seeing as they are at a 52 week low, now’s a good time to make the pick.
I’m not really a big penny-stock kinda guy (HSKA is trading at $0.42 for the pick) but I do like a good CROIC producer at half of book value. Definitely CAPS worthy.
Full disclosure: Long on HSKA. But, I mean, let’s not go crazy. It’s like a super small position. In my view this is a low risk pick because of the cheap price. They either go bankrupt (doubtful) or they go up. I told myself that I would act on my common sense more and stop overthinking everything. Let’s see if I’m right.
EDIT: So you can’t pick HSKA in CAPS right now. Dunno why, but let the record show! HSKA at $0.42