Q: Hello, I've been keeping an eye on hps.a for a while now and I'm considering getting in. With its earnings report approaching on the 25th, I'm wondering if I should wait until after the report is released before making a move. Would appreciate any advice you can offer. Thank you!
5i Research Answer:
We like its current level as a good level for accumulation. We do not think it is the type of stock to play for a quarterly report and should be a longer term position. The stock-based compensation issues seem to be largely old news now, however, if the stock materially re-inflates this could increase the charges on its income statement going forward. A decline in the stock price (particularly since its last earnings report) can also have a positive impact on its income statement next quarter, as the SBC charges can go down.
We would be comfortable slowly accumulating here, and continuing to reassess, particularly following its earnings report.