Hill Int'l gains wiped out as Dubai bubble pops
Hill International, Marlton, was one of the few U.S. stocks seen as a winner earlier this year, as Mideast economies kept expanding, while the U.S. and Europe slowed. Now that the world is sharing the economic pain, Hill's stock market gains have been wiped out.
Shares of Marlton-based Hill International traded lower again this morning, after dropping 12 percent yesterday and a total of 66 percent since August, writes Boenning & Scattergood analyst William Sutherland in a note to clients. He blames "the perception that Hill is mainly a play on the Mideast development boom, which is in danger of becoming a bubble that bursts."
Mideastern deals represent 30 percent of Hill sales, Sutherland acknowledges, but that's spread out among Libya, Iraq, Egypt, and Abu Dhabi, among other markets, not just "extravagant" Dubai. The company's growth will slow, but he expects income will keep rolling in from multi-year contracts.
Hill, a construction project-management and claims firm with operations around the world, nearly tripled in value over the previous 12 months, on top of a 50 percent gain the year before, as the firm signed deal after deal in Arabic-speaking countries, harvesting contacts Hill had sown in the previous 10 years through its multilingual and diverse deal-making staff. Hill was one of the few U.S. stocks seen as a winner as Mideast economies kept expanding, while the U.S. and Europe slowed. Now that the world is sharing the economic pain, Hill's stock market gains have been wiped out.