Today I will purchase Blackhwak Network (HAWK) for the Growth Portfolio and Aggressive Growth Portfolio.
Blackhawk isn’t a familiar name to most investors, but its products are. The company does those gift cards you see in drug stores, eGift card sales, cards to get pre-paid phone service, and reloadable debit cards.
As of yesterday, the stock was $43 and sold for 20x 2015 earnings estimates. The estimated long-term growth rate is 20%, so I’m not overpaying for the stock. My 2015 Fair Value is $55 and 2016’s is $62.
The company beat the street estimate of $0.33 by 5 cents last night, and had beaten in the prior four qtrs. HAWK made $0.17 in the year ago period, so we have triple-digit profit growth (for only 20x earnings). I’ll have a more detailed research report next week after the numbers change.
I will sell Apple in the Aggressive Growth Portfolio to create space for HAWK. Apple is expected to open lower today after posting earnings that didn’t please investors.
