Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

BWS provides independent stock specific research focused on companies with distinct value that are going through a special situation where there is a tangible catalyst not priced in. The catalyst can be anything from new product, restructuring, M&A, management change, change in business strategy, etc. BWS’s focus is to understand the change and evaluate the potential return for investors.

BWS utilizes a self formed proprietary approach in discovering stocks by putting great emphasis on deep research. BWS does generate short recommendations following a similar criteria.

Equity Bottom-Up

<ul>
<li>Rising prices continued to have a positive impact for Hawkins (HWKN) in the March 2022 quarter</li>
<li>We had highlighted how the ongoing inflationary backdrop in commodities would benefit HWKN through higher liquid fertilizer sales, which is what occurred in the March quarter</li>
<li>The continuation of industrial segment pricing marching higher is unlikely, but such an event would reintroduce gross margins above 20 percent</li>
</ul>


Rising prices continued to have a positive impact for Hawkins (HWKN) in the March 2022 quarter
We had highlighted how the ongoing inflationary backdrop in commodities would benefit HWKN through higher liquid fertilizer sales, which is what occurred in the March quarter
The continuation of industrial segment pricing marching higher is unlikely, but such an event would reintroduce gross margins above 20 percent


<ul>
<li>HWKN benefited from rising specialty chemical prices to reach a new quarterly revenue record for its industrial segment.</li>
<li>The latest quarterly results show the benefits of HWKN’s diversified approach to specialty chemicals. </li>
<li>HWKN reported fiscal Q3 sales of $187.1 million and net income of $10.2 million, or $0.48 per share. We had been forecasting sales to reach $156.8 million in the quarter</li>
</ul>


HWKN benefited from rising specialty chemical prices to reach a new quarterly revenue record for its industrial segment.
The latest quarterly results show the benefits of HWKN’s diversified approach to specialty chemicals. 
HWKN reported fiscal Q3 sales of $187.1 million and net income of $10.2 million, or $0.48 per share. We had been forecasting sales to reach $156.8 million in the quarter


HWKN: Price and Volume Lead to New PT of $52

<ul>
<li>HWKN used the backdrop of the holidays to add to its water treatment business, but the catalyst for fiscal third quarter (December) results could be the health and nutrition segment</li>
<li>The health and nutrition segment experienced an increase in sales in FYQ2 due to the late summer wave of COVID-19. Current COVID-19 wave could result in FYQ3 sales also increasing</li>
<li>HWKN was already benefiting from growth in the water treatment business and higher chemical prices</li>
</ul>


HWKN used the backdrop of the holidays to add to its water treatment business, but the catalyst for fiscal third quarter (December) results could be the health and nutrition segment
The health and nutrition segment experienced an increase in sales in FYQ2 due to the late summer wave of COVID-19. Current COVID-19 wave could result in FYQ3 sales also increasing
HWKN was already benefiting from growth in the water treatment business and higher chemical prices


<ul type="disc"><li>Increase in demand and volumes supported Hawkins (HWKN) report fiscal second quarter (September) sales ahead of our forecasts. We had increased our numbers ahead of the results citing continued price appreciation across the product spectrum.</li></ul> <ul type="disc"><li>The rise in chemical costs did result in HWKN taking an accounting charge of $2.5 million for last in first out (“LIFO”). The charge resulted in gross margin declining in the quarter even though free cash flow continues to pace ahead of our expectations.</li></ul> <ul type="disc"><li>HWKN is benefiting from continued demand for specialty chemicals during a time when supply is tight. The volume and price increase should result in HWKN reporting higher earnings in subsequent quarters.</li></ul> <ul type="disc"><li>The industrial segment experienced sales growth of approximately 36 percent compared to the year ago period. HWKN has used its storage capacity to capitalize on greater demand in the market.</li></ul>

Increase in demand and volumes supported Hawkins (HWKN) report fiscal second quarter (September) sales ahead of our forecasts. We had increased our numbers ahead of the results citing continued price appreciation across the product spectrum. The rise in chemical costs did result in HWKN taking an accounting charge of $2.5 million for last in first out (“LIFO”). The charge resulted in gross margin declining in the quarter even though free cash flow continues to pace ahead of our expectations. HWKN is benefiting from continued demand for specialty chemicals during a time when supply is tight. The volume and price increase should result in HWKN reporting higher earnings in subsequent quarters. The industrial segment experienced sales growth of approximately 36 percent compared to the year ago period. HWKN has used its storage capacity to capitalize on greater demand in the market.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Financial Select Sector SPDR F / Technical Analysis

We continue to see a steady flow of risk-on signals that have us moving toward an outright bullish outlook for the broad US equity market. Below we discuss several bullish developments that leads us to believe we are close to exiting the "mixed market environment" that we have referenced since late March.Charts highlighted: XLF, KBE, Copper, US Dollar, IWD, XLY, Bitcoin, S&amp;P 500, APO, LPLA, ARCC, JHG, KKR, ALLY, CACC, OMF, CIT, WD, GATX, LC, CODI, WRLD, ATLC, BCPC, TROX, ASPN, ASIX, LXU, HWKN, MOS, CF, ICL, SQM, UAN, IPI

We continue to see a steady flow of risk-on signals that have us moving toward an outright bullish outlook for the broad US equity market. Below we discuss several bullish developments that leads us to believe we are close to exiting the "mixed market environment" that we have referenced since late March.Charts highlighted: XLF, KBE, Copper, US Dollar, IWD, XLY, Bitcoin, S&amp;P 500, APO, LPLA, ARCC, JHG, KKR, ALLY, CACC, OMF, CIT, WD, GATX, LC, CODI, WRLD, ATLC, BCPC, TROX, ASPN, ASIX, LXU, HWKN, MOS, CF, ICL, SQM, UAN, IPI

Upgrading Financials To Overweight; Downgrading Communications To Market Weight

United States

Hawkins, Inc. formulates, manufactures, blends, distributes, and sells reagent grade laboratory chemicals and industrial chemicals.  The Company also provides water treatment equipment and chemicals to commercial and industrial entities. Hawkins services customers located in the Midwest United States.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Hawkins Inc (HWKN US)

HWKN: Beat and Raise Quarter

Elevated demand within the industrial segment stemmed from farmers purchasing liquid fertilizer. Some of the gains also came from contract...

BWS Financial Inc

HWKN: Price and Volume Lead to New PT of $52

Price and volume increases continued in the quarter beyond our forecasts. We are expecting continuation into the March quarter.

BWS Financial Inc

HWKN: Outlook of a Beat

The purchase of NPACO Chemical should result in a slight bump in March 2022 sales numbers. The catalyst for December quarter earnings could be the...

BWS Financial Inc

HWKN: Demand Benefits

A LIFO charge resulted in gross margin declining. Selling prices continue to increase with demand rising due to supply constraints. HWKN's water...

BWS Financial Inc

Upgrading Financials To Overweight; Downgrading Communications To Market Weight

We are upgrading Financials to overweight; Financial Sector ETFs (XLF, RYF), banks (KBE, KRE), and insurance stocks (KIE) are all breaking out to...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)