Seeking Alpha • Sep 27

Harte Hanks: Good Point To Start Accumulation Again (Technical Analysis)

Summary I've analyzed Harte Hanks' stock price action over the last 4 years and found a trading strategy that has worked well since the company's turnaround. The cumulative return of the strategy was 203.61%, which is 4.83 times more than a buy-and-hold strategy would bring. This strategy encourages the bulls to act again now. Taking into account the existing growth potential, the current valuation multiples cannot be described as too high in absolute terms, which supports the system's call to action. I think it makes sense to use the current trading signal for at least part of the desired amount - the AI algorithm draws above $12 per share by the end of January 2023. Thesis I've analyzed Harte Hanks' (HHS) stock price action over the last 4 years using TrendSpider Software and found a trading strategy that has worked well since the company's turnaround. The conclusions we can draw from backtesting are straightforward - the algorithm calls for buying HHS at the current level. The company's valuation after the recent sell-off offers enough potential to support this conclusion. Harte Hanks and my previous theses Harte Hanks, Inc. is a micro-cap company with a market capitalization of $75.88M at the time of this writing. It operates as a customer experience company in the US and internationally, dividing its operations into 3 segments: The Marketing Services segment delivers strategic planning, data strategy, performance analytics, creative development and execution, technology enablement, marketing automation, and database management; The Customer Care segment operates teleservice workstations in the United States, Asia, and Europe to provide advanced contact center solutions such as speech, voice and video chat, integrated voice response, analytics, social cloud monitoring, and web self-service; The Fulfillment & Logistics Services segment includes printing, lettershop, advanced mail optimization (including commingling services), logistics and transportation optimization, and monitoring and tracking to support traditional and specialty mailings. Since my last call, the company has not provided any new financials. To understand what happened in the above segments in the last quarter, I would like to quote my last article, where I analyzed the fundamentals in more detail. Let us now turn to the company's recent earnings call to understand what management expects in Q3/Q4 2022 and perhaps 2023. As you may see, the above-mentioned decrease in total revenues is due to a sharp decline in the Customer Care segment, which is due to the expected discontinuation of projects related to COVID. However, according to the CEO, this segment is expected to return to higher demand from existing and new customers in Q3 2022 as the company onboards agents to support the premiere of House of the Dragon. As the margins of this segment have improved on a half-year basis (due to cost optimizations), I expect that we will see revenue growth as well as EBITDA and EPS growth (at roughly the same margin level) in Q3 2022 due to new demand. As for the Fulfillment & Logistics business, the company has exceeded its own margin expectations - EBITDA of sales is 13.5% in 2H 2022, significantly better than in 2H 2021. The consolidation of operations into the Kansas City and Boston facilities, which I mentioned in the last article, is bearing fruit - Harte Hanks has a rapidly growing customer base and order book, while the major competitors in this industry are suffering from the size of their operations. Margins for this HHS segment will most likely stop increasing - or even decrease slightly - due to the impact of consolidation, but we will most likely see a positive change again in Q3 2022 due to the new volume. The Marketing Services segment is currently facing temporary difficulties - as expected, customers' advertising budgets began to shrink due to uncertainty about the impending recession. However, HHS management remains optimistic, talking about a new partnership with a regional bank signed in Q2 2022. At the time, HHS' financial success allowed it to exceed EPS expectations by nearly 90% and show roughly expected revenue, according to TradingView: Tradingview, HHS My coverage began a month before that August report when I drew attention to the company's fairly strong growth against a backdrop of modest valuation. I was also taken with the planned sale of preferred stock - this was to simplify the company's capital structure, and the one-time cost of such disposal while maintaining a steady growth rate should have paid off very quickly. The stock was gaining momentum at that point, and after my initial call, HHS went up 50% in a few days. Then I looked at the price action and realized that HHS had moved too far away from all the major moving averages and the forwarding valuation multiples were no longer low enough to provoke a similar rise. Data by YCharts Therefore, I have downgraded the rating from "Strong Buy" to "Buy" and reminded everyone that mean reversion is inevitable in such cases. It has been 35 days since the last article was written and HHS has fallen from $17.22 to the current $10.74 - that is -37.63%. The reversion to the mean occurred against a backdrop of general market weakness - over the same period, the S&P 500 Index fell 11.44%. So, given HHS's micro market capitalization, it's not surprising that momentum has changed so quickly. So what about now? As the stock continued to fall, I was repeatedly asked in the comments when HHS would return to the buy zone. Even long-term investors do not want to see big unrealized losses, even if they are convinced of the company's fundamental prospects, so technical analysis becomes as important as fundamental analysis. Since the company has not yet released financials (the Q3 report will be available on November 11) and the recent news about the partnership with FEVO is difficult to quantify, this time I decided to spend more time analyzing price action. I have included the data for the last 4 years - this is the period that has become a turning point for the company. Before that, Harte Hanks had problems with debt, with corporate development strategy. When new management came in and new initiatives emerged that led to a revitalization of the business, HHS stock price began to recover quickly - this just happened in the last 4 years. Considering today's oversold conditions (RSI below 30), I wonder if the current extremely low levels of the RSI are a sufficient argument for buying HHS. But to check that, you have to base the criterion for exiting a position - why not focus on the RSI again? For the exit, I chose the other extreme of this indicator - an extremely overbought RSI level of 75 and higher (I remind you that theoretically the stock is already considered overbought at the RSI >70). After analyzing the last 4 years, TrendSpider's backtesting system has produced the following results when applying the strategy described above: Data Analyzed 4 years Net Profit 203.61% Asset Perf. 42.18% Beta (vs Asset) 1.62 Positions 5 Wins 80% Losses 20% Max Drawdown -71.63% Average Win 50.78% Average Loss -27.45% Average Return 35.13% Rew/Risk Ratio 1.85 Expectancy 1.28 Source: TrendSpider, author's inputs That is, in the last 4 years, only 5 positions were opened, but despite the drawdown in one of them by 27.45% (holding period from October 2018 to September 2019), the cumulative return was 203.61%, which is 4.83 times more than a buy and hold strategy would bring. If we look at the behavior of the strategy, we find that the drawdown of the underlying was over ~85% since the start of the system testing, and the drawdown of the strategy was slightly better - about 71%: TrendSpider, HHS, Performance Chart The average trade opened below RSI 30 and closed above 75 earning the hypothetical investor an average of 35.13%, with the average position held open for about half a year. And what is most important for us now is that the 5th deal, which the system also takes into account in its calculations, was opened yesterday: TrendSpider, HHS

Seeking Alpha • Aug 23

Harte Hanks: Mean Reversion Imminent, But Still A Buy For Patient Investors

I am updating my thesis on Harte Hanks' stock and classifying it as a "Buy" instead of a "Strong Buy" as I did months ago. Harte Hanks' stock may soon go into reverse, but if you bought HHS with the desire to hold the stock for the long term, you definitely have nothing to worry about. I believe HHS will continue to grow operationally and provide great value to its investors going forward - the company is still cheap and making good progress in its turnaround. Long-term investors may soon have the opportunity to buy HHS cheaper, so I recommend keeping an eye on the stock. Intro & Thesis A little over a month ago, I initiated coverage of a small-cap marketing and customer experience company Harte Hanks, Inc. (HHS) and gave the stock a Strong Buy rating based on its high-quality fundamental profile, growth prospects, and low valuation. In just one month, my thesis has held up quite well, even compared to the July rally in the broader stock market: Seeking Alpha, my article on HHS [July 14] Since the publication of that article, the company has managed to report and hold an earnings call for analysts and investors. For this reason, I have decided to once again focus my attention and yours on HHS. Based on my updated analysis, I conclude that HHS, which has risen >50% in just 2 weeks, could face mean-reversion effects in the days ahead - especially if the S&P 500 (SPY) continues to correct below its 200-day moving average. However, if you bought HHS with the desire to hold the stock for the long term, you definitely have nothing to worry about - the valuation is still quite low, the turnaround is progressing, and the key fundamentals have only improved in Q2 2022. Therefore, I reiterate my buy recommendation, although I lower it from "Strong buy" given the high probability of a technical correction on the horizon. Why Do I Think So? For small-cap companies like HHS (market cap = $121 million), my observation is that fundamental changes within the company are more clearly reflected in stock prices. Either you grow and improve your business qualitatively (your stock starts to rise), or you lose - investors look at your capitalization and poor results and do not believe management's promises to fix everything when they fail, as is often the case with large technology companies, for example. That's why the extraordinary growth in HHS stock over the past year fits in with the company beating analysts' forecasts quarter after quarter: HHS Total Return Level data by YCharts Seeking Alpha, HHS, author's notes In the last reporting quarter (Q2 2022), Harte Hanks again managed to exceed analysts' expectations and deliver an EPS surprise of 89%. Revenue growth broke a number of positive surprises and was actually 1.5% lower than expected by the Street. However, as we all know very well, revenue is only the first key element of the income statement, but far from the last. Investors are interested in the profit and how the company copes with the tasks set for the turnaround - I talked about this in my last article. HHS's IR materials The business structure of the company is as follows: The Marketing Services segment delivers strategic planning, data strategy, performance analytics, creative development and execution, technology enablement, marketing automation, and database management; The Customer Care segment operates teleservice workstations in the United States, Asia, and Europe to provide advanced contact center solutions such as speech, voice and video chat, integrated voice response, analytics, social cloud monitoring, and web self-service; The Fulfillment & Logistics Services segment includes printing, lettershop, advanced mail optimization (including commingling services), logistics and transportation optimization, and monitoring and tracking to support traditional and specialty mailings. Thus, despite the decline in sales in 2 of 3 segments, the company was able to increase its EBITDA growth to an impressive level by (its standards): HHS's recent 10-Q, author's notes Let us now turn to the company's recent earnings call to understand what management expects in Q3/Q4 2022 and perhaps 2023. As you may see, the above-mentioned decrease in total revenues is due to a sharp decline in the Customer Care segment, which is due to the expected discontinuation of projects related to COVID. However, according to the CEO, this segment is expected to return to higher demand from existing and new customers in Q3 2022 as the company onboards agents to support the premiere of House of the Dragon. As the margins of this segment have improved on a half-year basis (due to cost optimizations), I expect that we will see revenue growth as well as EBITDA and EPS growth (at roughly the same margin level) in Q3 2022 due to new demand. As for the Fulfillment & Logistics business, the company has exceeded its own margin expectations - EBITDA of sales is 13.5% in 2H 2022, significantly better than in 2H 2021. The consolidation of operations into the Kansas City and Boston facilities, which I mentioned in the last article, is bearing fruit - Harte Hanks has a rapidly growing customer base and order book, while the major competitors in this industry are suffering from the size of their operations. Margins for this HHS segment will most likely stop increasing - or even decrease slightly - due to the impact of consolidation, but we will most likely see a positive change again in Q3 2022 due to the new volume. The Marketing Services segment is currently facing temporary difficulties - as expected, customers' advertising budgets began to shrink due to uncertainty about the impending recession. However, HHS management remains optimistic, talking about a new partnership with a regional bank signed in Q2 2022. In addition, the company plans to complete the repurchase of preferred shares from Wipro (WIT) in Q3 2022 - this is a little tailwind for common shareholders for Q4, in my opinion. ... we reached an agreement with Wipro at the end of the quarter, in which we will acquire all of the outstanding preferred shares for a onetime cash payment of $9.9 million and 100,000 common stock shares. Please note that under GAAP at closing, this transaction will result in adjustments to our earnings per share but not our net income. This is likely to close during the third quarter. The elimination of the preferred stock dividend accrual and the earnings attributable to preferred shareholders will be offset by a onetime accounting charge based on the fair value of the common shares. We funded the cash portion of the repurchase consideration with a combination of cash and cash equivalents on hand and an additional $5 million borrowing under our credit facility. Source: HHS's earnings call According to YCharts, Harte Hanks generated nearly $8.5 million in free cash flow in 2Q2022, which is comparable only to the pre-crisis periods in which the company operated. Data by YCharts I believe that HHS will continue to grow operationally and provide great value to its investors in the future. Therefore, TTM FCF values should not be used as the sole benchmark for valuing a company as they are blind to the prospects. Why do I mention this? Because Seeking Alpha's Quant rating system shows that HHS's "Valuation" grade is "C+" while its price-to-cash flow ratio ((TTM)) is the only valuation factor of this quality in the sample. The other ratios are much better: Seeking Alpha, HHS, Valuation, author's notes

Punteggio fiocco di neve
Valutazione	2/6
Crescita futura	0/6
Prestazioni passate	0/6
Salute finanziaria	6/6
Dividendi	0/6

Prezzi storici delle azioni
Prezzo attuale dell'azione	US$4.20
Massimo di 52 settimane	US$4.50
Minimo di 52 settimane	US$2.00
Beta	0.093
Variazione di 1 mese	-2.33%
Variazione a 3 mesi	71.43%
Variazione di 1 anno	10.38%
Variazione a 3 anni	-32.48%
Variazione a 5 anni	-39.57%
Variazione dall'IPO	-88.63%

	HHS	US Media	US Mercato
7D	-1.6%	-0.4%	-0.9%
1Y	10.4%	-28.6%	14.2%

HHS volatility
HHS Average Weekly Movement	18.3%
Media Industry Average Movement	9.8%
Market Average Movement	6.9%
10% most volatile stocks in US Market	15.3%
10% least volatile stocks in US Market	2.9%

HHS statistiche fondamentali
Capitalizzazione di mercato	US$31.31m
Utili (TTM)	-US$5.71m
Ricavi(TTM)	US$154.63m

Statistiche chiave sulla redditività dall'ultima relazione sugli utili (TTM)
HHS Conto economico (TTM)
Ricavi	US$154.63m
Costo del fatturato	US$129.77m
Profitto lordo	US$24.85m
Altre spese	US$30.57m
Utili	-US$5.71m

Utile per azione (EPS)	-0.77
Margine lordo	16.07%
Margine di profitto netto	-3.70%
Rapporto debito/patrimonio netto	19.5%

Dati	Ultimo aggiornamento (ora UTC)
Analisi dell'azienda	2026/09/13 11:43
Prezzo dell'azione a fine giornata	2026/09/11 00:00
Utili	2026/06/30
Utili annuali	2025/12/31

Pacchetto	Dati	Tempistica	Esempio Fonte USA ^*
Dati finanziari della società	10 anni	Conto economico Rendiconto finanziario Bilancio	Modulo SEC 10-K Modulo SEC 10-Q
Stime di consenso degli analisti	+3 anni	Previsioni finanziarie Obiettivi di prezzo degli analisti	Rapporti di ricerca degli analisti Blue Matrix
Prezzi di mercato	30 anni	Prezzi delle azioni Dividendi, scissioni e azioni	Dati di mercato ICE Modulo SEC S-1
Proprietà	10 anni	Top azionisti Insider trading	Modulo 4 SEC Modulo 13D SEC
Gestione	10 anni	Team di leadership Consiglio di amministrazione	Modulo SEC 10-K Modulo SEC DEF 14A
Sviluppi principali	10 anni	Annunci aziendali	Modulo 8-K SEC

Harte Hanks (HHS) Panoramica del titolo

Analisi del rischio

Top Community Narratives

Star Equity (STRR) is buying Harte-Hanks (HHS) at $5.00 a share, half in cash and half in a 10% cumulative preferred (STRRP). HHS trades at

Top Community Narratives

Star Equity (STRR) is buying Harte-Hanks (HHS) at $5.00 a share, half in cash and half in a 10% cumulative preferred (STRRP). HHS trades at

Concorrenti di Harte Hanks, Inc.

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Storia dei prezzi e prestazioni

Notizie e aggiornamenti recenti

Star Equity (STRR) is buying Harte-Hanks (HHS) at $5.00 a share, half in cash and half in a 10% cumulative preferred (STRRP). HHS trades at

Star Equity Holdings, Inc. (NasdaqGS:STRR) entered into a merger agreement to acquire Harte Hanks, Inc. (NasdaqGM:HHS) for $39.2 million.

Second quarter 2026 earnings released: US$0.67 loss per share (vs US$0.045 loss in 2Q 2025)

Is Harte Hanks (NASDAQ:HHS) In A Good Position To Deliver On Growth Plans?

New major risk - Share price stability

First quarter 2026 earnings released: US$0.085 loss per share (vs US$0.053 loss in 1Q 2025)

Recent updates

Star Equity (STRR) is buying Harte-Hanks (HHS) at $5.00 a share, half in cash and half in a 10% cumulative preferred (STRRP). HHS trades at

Star Equity Holdings, Inc. (NasdaqGS:STRR) entered into a merger agreement to acquire Harte Hanks, Inc. (NasdaqGM:HHS) for $39.2 million.

Second quarter 2026 earnings released: US$0.67 loss per share (vs US$0.045 loss in 2Q 2025)

Is Harte Hanks (NASDAQ:HHS) In A Good Position To Deliver On Growth Plans?

New major risk - Share price stability

First quarter 2026 earnings released: US$0.085 loss per share (vs US$0.053 loss in 1Q 2025)

Is Harte Hanks (NASDAQ:HHS) In A Good Position To Invest In Growth?

Harte Hanks, Inc., Annual General Meeting, May 21, 2026

Improved Revenues Required Before Harte Hanks, Inc. (NASDAQ:HHS) Stock's 25% Jump Looks Justified

Returns At Harte Hanks (NASDAQ:HHS) Are On The Way Up

Harte Hanks, Inc. Appoints David Fisher as President

We're Hopeful That Harte Hanks (NASDAQ:HHS) Will Use Its Cash Wisely

Investors Don't See Light At End Of Harte Hanks, Inc.'s (NASDAQ:HHS) Tunnel

Harte Hanks, Inc., Annual General Meeting, May 22, 2025

Harte Hanks, Inc. Announces Executive Changes

Harte Hanks, Inc. to Report Q3, 2024 Results on Nov 14, 2024

Harte Hanks, Inc Announces Executive Changes

Harte Hanks, Inc. Appoints Sharona Sankar-King as Chief Customer and Data Officer

Harte Hanks, Inc. to Report Q2, 2024 Results on Aug 08, 2024

Harte Hanks, Inc.(NasdaqGM:HHS) dropped from Russell Microcap Value Index

Investors Aren't Entirely Convinced By Harte Hanks, Inc.'s (NASDAQ:HHS) Revenues

Harte Hanks Launches Demand Generation in a Box

CEO & Director recently bought US$50k worth of stock

First quarter 2024 earnings released: US$0.024 loss per share (vs US$0.11 loss in 1Q 2023)

Harte Hanks, Inc. to Report Q1, 2024 Results on May 09, 2024

Harte Hanks, Inc., Annual General Meeting, May 23, 2024

Full year 2023 earnings: Revenues exceed analysts expectations while EPS lags behind

Harte Hanks, Inc. to Report Q4, 2023 Results on Mar 14, 2024

Harte Hanks, Inc. Appoints Luke Kenny as Sr. Director of International Sales and Client Expansion

Harte Hanks, Inc. Appoints David Fisher as Chief Transformation Officer

Harte Hanks, Inc. Appoints David Garrison as Permanent Chief Financial Officer

Less than half of directors are independent

Independent Director recently bought US$68k worth of stock

New major risk - Revenue and earnings growth

Third quarter 2023 earnings: EPS and revenues miss analyst expectations

Harte Hanks, Inc. Names Ron Lee as Senior Vice President of Inside Sales

With EPS Growth And More, Harte Hanks (NASDAQ:HHS) Makes An Interesting Case

Harte Hanks, Inc. to Report Q3, 2023 Results on Nov 09, 2023

Harte Hanks, Inc. Appoints Kelly Waller as Senior Vice President of Sales and Marketing

Harte Hanks Announces Executive Changes

Harte Hanks, Inc.'s (NASDAQ:HHS) Intrinsic Value Is Potentially 30% Above Its Share Price

Now 23% undervalued

CEO & Director recently bought US$51k worth of stock

Second quarter 2023 earnings: EPS and revenues miss analyst expectations

Harte Hanks, Inc. to Report Q2, 2023 Results on Aug 10, 2023

Harte Hanks Inc. Appoints Kirk Davis as Member of the Board of Directors

Harte Hanks (NASDAQ:HHS) Is Experiencing Growth In Returns On Capital

Harte Hanks, Inc. Elects Genni Combes as Board Nominee

Price target decreased by 13% to US$20.00

Consensus EPS estimates fall by 46%

Harte Hanks, Inc. (NasdaqGM:HHS) announces an Equity Buyback for 10% of its issued share capital, for $6.5 million.

First quarter 2023 earnings: EPS and revenues miss analyst expectations

Price target increased by 9.5% to US$23.00

Should You Investigate Harte Hanks, Inc. (NASDAQ:HHS) At US$8.83?

Full year 2022 earnings: EPS and revenues exceed analyst expectations

Does Harte Hanks (NASDAQ:HHS) Deserve A Spot On Your Watchlist?

CEO & Director recently bought US$56k worth of stock

Are Investors Undervaluing Harte Hanks, Inc. (NASDAQ:HHS) By 22%?

Consensus EPS estimates increase by 14%

Price target increased to US$21.00