NFTRH+; HURC 3D Hype & Mach Tool Q4 Sales

Hurco was mentioned in NFTRH 315 as a potential bear opportunity after an expected year-end bump in US machine tool sales.  This general plan of course assumes a rising US dollar, which would eventually pressure the manufacturing sector.

This NFTRH+ update is going to be a little different and perhaps set a template for some of its future updates.  No chart based buy/sell/short/stop parameters.  Just a heads up on an individual stock for your own ongoing research if interested.

TheStreet.com had a hype piece on Hurco about its adapter for CNC machines, quoting Hurco’s president with a nice pump, using the words “additive manufacturing” (that was so 2013) no less.

“We designed an additive manufacturing adapter that, in combination with proprietary Hurco control software, effectively turns a CNC milling machine into a 3D printer,” said Gregory Volovic, President of Hurco Companies.

I don’t like it on the smell test but have not looked deeper into the situation.  Remember, this was my industry.  I’ll look into it and if it stays interesting I’ll put it in NFTRH 316.

HURC has a forward PE of 18, which is very rich for a run of the mill (no pun intended) CNC milling machine maker.  A 3D printer is a 3D printer and a milling machine is a milling machine.  This smacks of b/s and salesmanship, which is fine and dandy for a company in its own marketing, but when a public company gets Wall St. involved, you know the drill.

Here is the chart.  You can see that the pump piece (7.17.14) came out around the time of a massive run up in the stock.  The current run up could be the stock’s anticipation of what we have been noting in NFTRH, the expected general ramp up in machine tool sales for Q4.  In other words, a shorting opportunity could be developing per the general plan.  The 3D hype could be a bonus.

hurc

Just some points of reference for anyone interested in looking further into this situation.  Personally, I shorted 3D printing hype in 2013 by way of DDD and SSYS after outrageous news releases pumped their share prices.  This on the surface at least, seems at least as potentially viable.

It might be a good idea to let this stew a bit, take our time and evaluate.  In the meantime, I’ll try to get confirmation that machine sales are indeed percolating now to see if we can’t get a front run on data to be released later.

A reminder that chart based NFTRH+ updates are just trade setup ideas, which may not be revisited as the parameters are already noted.  They are meant as a starting point for further research if interested. 

Fundamentals-based ideas are also provided for your further research only.