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Hi,


I hope this board was the right place for this question!

I'm new to this, very new. In fact, I begin building my portfolio only one month ago. In that time, I've learned enough to know this one might have been a mistake; or was it? This is my question to you. Could this be a hidden Gem and my timing was just bad? Do I hold, sell, or cost-average (buying a bit more)?

The company in question is Heartland Payment Systems (HPY). The bottom line is this. I bought at $ $29.50 and now it is at $25.62. Down 13.15%.

Here is what I have found out:
HPS is the 6th largest pay and payment processing company in the US. They just made the IT 100 list. Unlike many of their competitors, they own various aspects of their business rather than outsourcing. Included is customer service call centers and the hardware and software. I was impressed when they rolled out new software to 100,000 clients in what appeared to be a short amount of time. In my experience, this means a well designed pipeline which in turn means a good technical plan. HPS is also building (if they haven't already finished?) a new facility to house their growing departments, improve employee lifestyle and increase communication.

I'm nowhere near expert, but, reading the HG report “6 Danger Signs You Can Check in 15 Minutes” got me to start looking at the balance sheet and income statements. They seem to be growing fast and strong. Debt is going down. Assets are increasing. Their margin seems small, but improvable. (I'll leave the details out to keep a long post from getting longer).

In fact, everything I see tells me to go on liking the company. Except one, small number: the P/E was over 50 when I bought. Could this be all I'm seeing? Is it simply that the market also thinks the company is good, and the stock has become overvalued? How long can it take to balance and start making money? Is it something else that I am missing?

The only other items of note are: The Chief Operations Officer has stepped down but is still an employee. There is also a conference call scheduled to “discuss the 2Q results”.


If you read all of that, I think you! If you can help, I'll thank you more!


- Rafe


P.S. Not a word about the username! It was better than Rafe020!
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