![]() ![]() Growing Revenue and Healthy Profit Margins This will bode well for future revenue and earnings. ![]() This helps me believe that the leadership team has been thoughtful around acquisitions. Their operating cash flows also cover 25% of their debt and their interest cover ratio is at 10.3 times. Usually, debt to equity ratio below 1 is considered good. Helios' debt to equity ratio has increased gradually over the last 3 years. This brings into question their net assets positions and if their debt ratios are still healthy. Two of these acquisitions had no disclosed price but the Balboa deal was done with $16 million in cash and the rest through a credit agreement. In trying to achieve their augmented strategy, Helios have done 3 acquisitions in the last 2 years. Most of this growth comes from their health and wellness and recreational end-markets. Inflationary and supply chain pressures are clearly coming through as they are losing Gross and Operating Margin. The growth in the Electronics division was great across all regions. Geographically, APAC is lagging but significant growth in Americas and EMEA could be seen as more sustainable. Helios have shown great performance showing growth and losing only 50 bps on their Operating Margin in Q1. The Electronics segment provides electronic control, display, and instrumentation solutions for recreational and off-highway vehicles and stationary and power generation equipment. The Hydraulics segment provides screw-in hydraulic cartridge valves, manifolds, and integrated fluid power packages and subsystems used in hydraulic systems. It operates through the Hydraulics and Electronics segments. engages in the development and manufacture of motion control and electronic controls technology for diverse end markets, including construction, material handling, agriculture, energy, recreational vehicles, marine, health, and wellness. I present a bull case for Helios as there seems to be a unique buying opportunity for this stock before its earnings announcement on 8 August. ![]() Helios' price fell from its high of $109.95 in November to $62.97 on 21 July 2022. They are on their way to that target with healthy profit margins. Helios have an ambitious target of $1bn in revenue by 2023. These issues impact their ability to deliver on time to customers. Supply chain issues are causing a rise in costs. Helios Technologies ( NYSE: HLIO) has sold off aggressively since the start of the year for good reasons. Active contributors also get free access to SA Premium. It's easy to become a Seeking Alpha contributor and earn money for your best investment ideas. Editor's note: Seeking Alpha is proud to welcome Aldrich Louw as a new contributor. ![]()
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