October 11, 2006

SpeculatingStocks.com Stock Pick: Home Solutions of America, Inc. (HSOA)

Stock Price: $5.78 (long-term strong buy)

Home Solutions of America, Inc. offers recovery, restoration, rebuilding/remodeling, and specialty interior services to commercial and residential properties in the United States. The company operates through two segments, Recovery/Restoration and Rebuilding/Remodeling.

For the latest quarter, HSOA reported revenue of $24.15 million with net income coming in at $4.46 million. This is a 90% growth in sales and 320% growth in earnings, over the same quarter last year. HSOA released ambitious guidance of $160 million to $165 million in revenue for this year with earnings per share of $0.56 to $0.60. This means, HSOA could generate over $25 million in net income this year. Last year, HSOA generated revenue of $68.13 million with net income of $7.18 million.

HSOA traded as high as $14.14 in late May. HSOA is working off of a double bottom below $5.00 and has strong potential in the short-term.

Currently, 34.36% of the HSOA float is short. Investors are shorting this stock because it is in the housing sector, but HSOA is growing strong as home owners look to remodel their homes to make them increase in value.

The subsidiary of HSOA just received a $5 million contract for restoration and rebuilding services in the historic French Market of New Orleans. HSOA operates in such a hot area for their line of business.

HSOA should see $7.00 in the short-term, but its long-term picture is even more rewarding especially if the company hits their guidance.

SpeculatingStocks.com Target Price: We expect HSOA to reach $14.00 within the next 6 - 12 months.