HTLJ - The Guru's Next Buy and Hold

In a penny stock market full of stocks that are treated like a burning hot chunk of coal, it is rare to find a stock that is worth holding on to for more than a few hours or a few days.  It seems to be even more true today, as investors must be even more careful when making their investment decisions.  It is why I am constantly looking for respectable penny stocks, ones that you can invest in and not have to worry about it on a daily basis.  One stock that bears looking into is HTLJ - Heartland.  This $.20 stock is one of the most undervalued stocks out there, and I believe down the road it could be trading better than $2 a share.


When the CEO, CFO, and company officers are buying back stock you usually can feel confident that the stock is undervalued.  Who knows what's going on with a company better than insiders?  Recent Form 4 SEC filings have shown Heartlands CEO, CFO, and officers have purchased shares at $.30 which is above today's close and says a lot about where they think the stock is headed.  I agree with them and think this stock's days trading under $1 a share are numbered.

Let's delve into some of the company numbers which are very impressive.

The outstanding shares for HTLJ are 22,369,000 and  market cap for HTLJ is $5,806,783.  The company has $26 million in total assets or over $1 a share in assets and $20 million in liabilities.  The company had over $91 million in revenue last year, up from $39 million the year before.  How's that for revenue growth?


The company is producing over $4 a share in revenue and its assets outnumber its liabilities by over $6 million.  The growth of this company is astounding and the best part is this growth is not based upon over leverage.  The company has not burdened itself with debt to grow organcally, and will continue to grow in the future.


I took this right from Heartlands 2009 annual report: "It is our belief that our stock is currently undervalued and that we are better suited to fund current projects through cash provided from operations and financing rather than attempting to sell what we belief to be an undervalued asset and further dilute the securities."

The above statement means you can rule out dilution as a means of growth as well.  The company has over a million in cash on hand at the end of the most recent quarter.  The also have available credit and other means to grow besides share issuance, which brings me to the only negative, and the reason why this stock isn't already trading over $1.  A former board member and shareholder has been liquidating his holdings and still has a substantial position in the stock.  Once this disgruntled former employee is out of the way this stock will head right were it belongs.


It will take some time for this stock to finally get its wings, but the reward will be worth it when this stock goes back over $1 and possibly to $4.00.  Yahoo has the enterprise value of HTLJ at $21.75 which is almost $1 a share.  That would be the theoretical value of the stock if someone wanted to buy them out.  I think it is higher than that now as the growth for HTLJ is off the charts.


For those of you who are patient with stocks and don't mind waiting for your gains HTLJ is your stock.  It is a solid company and currently trading over 75% less than it's fair value.  At some point soon that will change and the Guru is giving you advanced notice.