Tuesday, December 18, 2007

Continuining to Like the Action in Huron Consulting (HURN)

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I've moved Huron Consulting (HURN) up to the top position in the fund with a 3% allocation. This was one of two 'recession plays' I bought in late November [2 New Recessions Plays] - 2 companies (along with FTI Consulting (FCN)) that would benefit from a wake of restructurings that I anticipate will be hitting US companies in the coming 2 years. But these are also companies with many other consulting opportunities in an increasingly flat and sophisticated world. Since my original purchases of both, around 1% of the fund at the time, FCN has generally been sitting flat, hovering around its 50 day moving average but threatening to break below at any moment. Huron on the other hand, has had much more promising action, and has cleared recent intraday highs of $77... hence a nice bullish move today, with a 4% gain, and an attack on $78.

After Huron's earnings snafu a huge gap was created in the chart between $70 and $80, so I expect the stock to have some issues once it reaches $80, but if it can get through that level, a move to all time highs north of $83 could be in order. As I stated, with the difficulties in the US economy, the need for services from these type of companies will be far greater in the coming years, and Huron seems to be reflecting this. I will wait for a similar move from FTI Consulting before adding any more to that position - it has had a tremendous run in the past year (100% gain) and is currently consolidating those gains.

Long both names in fund; no personal positions



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