9 November 2006

HIHO just came out with news this morning they are giving a semi-annual dividend of .16 per share!! That is great News. It will be paid on Dec. 8th for those on record as of Nov. 28th.

At $3.38 per share a .16 dividend is 4.7%!

Getting a free 5% and the book value is right around here so the downside risk isn't huge.

Instead of .20 it is .16, which normally I would have a problem with, but they are aggressively purchasing other companies which takes cash. I would rather have them do the deals like they did in September and use the cash that way.

But this payout should only cost them about $600,000 in cash which isn't much they have 10x that in cash roughly.

Nice little bonus after the stock got whacked on the earnings.

The real question is what will earnings be?

That will be the key. The first quarter was .16 and the 2nd was .05. So which is it going to be? From what I understand a good chunk of the .16 was due to currency exchange stuff.

So if they are only a company that can earn .20 a share per year then this stock isn't that exciting. At 15 x earnings that is $3 stock. We are trading roughly at book value right now.

Yes the new company they just bought should add .07-08 EPS according to my estimates.

I need this stock to be $6.50 or so to be worth it based on where I got in etc. At $3.30 there is some support here and again at $3. If it breaks that could see $2.50.

I would really like it at that level, but if they only earn .20 per share, that is about fairly valued anyway, so it isn't that great.

I think this may be a long road ahead for HIHO unless earnings really come thru big in the next couple quarters.

They have said that expenses may be a problem in the coming quarters.

We will see where it goes. I think the 3rd quarter numbers need to be impressive. Otherwise I think it will go under $3. I don't see a run to $5 prior to that news release. (Which would be in Late Jan.)

After the initial run up from this dividend news I think could purchase a bit cheaper in mid December but will see.

If earnings are good over the next 3-12 months this could be a very good stock. If earnings are poor this stock will stick in the $2-3 range. The dividend helps though no question.

I am in for the long haul and would love to see what HIHO can do.

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Steve Hoven

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