HDSN - Hudson Technologies, Inc.

[ValueSlant]

Hudson Technologies (HDSN) is a distributor and recycler of refrigerant gases. The company is poised to benefit from an EPA mandated phase out of virgin gas production of the leading refrigerant that will boost market pricing and volumes of reclaimed refrigerant where Hudson is the dominant player. Hudson stock remains depressed due to investor fatigue with the slow to develop shift in market dynamics and a general lack of Street recognition. The stock trades at 2-3X projected earnings when the market shifts, while the EPA is set to finalize substantially reduced virgin gas production quotas in the coming months. In the meantime, the company has expanded market share and is substantially profitable.

 

Rest of writeup here:

http://valueslant.com/2012/01/10/hudson-technologies-hdsn-taking-advantage-of-epa-phaseout/

 

I appreciate any comments

 

ValueSlant

[Baoxiaodao]

Hudson Technologies (HDSN) is a distributor and recycler of refrigerant gases. The company is poised to benefit from an EPA mandated phase out of virgin gas production of the leading refrigerant that will boost market pricing and volumes of reclaimed refrigerant where Hudson is the dominant player. Hudson stock remains depressed due to investor fatigue with the slow to develop shift in market dynamics and a general lack of Street recognition. The stock trades at 2-3X projected earnings when the market shifts, while the EPA is set to finalize substantially reduced virgin gas production quotas in the coming months. In the meantime, the company has expanded market share and is substantially profitable.

 

Rest of writeup here:

http://valueslant.com/2012/01/10/hudson-technologies-hdsn-taking-advantage-of-epa-phaseout/

 

I appreciate any comments

 

ValueSlant

 

As always, I enjoyed reading your ideas. Thanks!

[longtermdave]

The value behind Hudson Technologies has been discussed in other places (VIC, ValueSlant (gone?), SeekingAlpha), and I don't have an updated opinion of its value. I'm bringing this to the board's attention because the stock was downgraded by TheStreet.com and may present another buying opportunity as a result.

 

This is a simple supply/demand based investment where rapidly decreasing supply should allow HDSN to charge higher prices for recycling air conditioning refrigerant. The catalyst for value realization - EPA mandated decreases in R-22 refrigerant production - remains intact and should be a large driver of company profits going forward. If anyone is following this stock I would appreciate your opinions regarding any significant risks you see.

[WideMoat]

The main risk I worry about with Hudson is cash needs.  As the price of refrigerant rises, the cash needed to hold inventory will as well.  Historically this has not been a business with quick inventory turns.  Management seems particularly apt at raising capital at inopportune times and at high costs.

 

Given past behavior, I wouldn't be surprised if they were in the market right now to raise equity.

[APG12]

The company has been up 25% and down 25% all within about a week! Since HDSN was written up twice on VIC and is now rated as their top idea, I was wondering if anyone has any new thoughts on it. It looks to me like the long-term thesis is intact. Anyone else following this out there?