The Motley Fool

Here’s why Hills Ltd plummeted 32% on Tuesday

Shares of technology and outdoor equipment specialist Hills Ltd (ASX: HIL) were absolutely smashed on Tuesday after the company reported a sharp decline in earnings whilst also predicting tough times ahead.

The shares were trading at a high of $2.10 12 months ago, but have since fallen 57%. They finished Monday’s session trading 32.33% lower at just 90 cents per unit.

HILLS

Source: Yahoo Finance

What Happened: For the half-year ended 31 December 2014, Hills recorded net profit of $9 million which represents a 36.2% decline on the $14.1 million reported in the prior corresponding period. Meanwhile, the company predicts its full-year net profit will come in between $18.5 million and $19.5 million. Assuming the profit comes in at the upper end of that range, it would still be a 21% decline compared to last year’s profit.

Hills’ management said: “The further downward pressure on the Australian dollar and the Reserve Bank’s forecast for a longer period of below trend growth imply a conservative outlook for the Australian economy and in turn our core business.”

Considering the headwinds facing the business, it seems investors would be best to avoid Hills Ltd for now.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned. You can follow Ryan on Twitter @ASXvalueinvest.

Related Articles...

Latest posts by Ryan Newman (see all)