HURC

Hurco ($HURC) Management Goes 'All-In' with $200K Buying at Lows... Major Shareholder Takes Opposite Route

07/07/2025 14:42

CNC machine manufacturer Hurco Companies ($HURC) is sending mixed signals to investors. This small-cap stock with a market capitalization of $94 million has experienced intense price volatility since suspending its dividend in June 2024, with insiders and major shareholders taking opposite investment approaches that warrant attention. Hurco manufactures computer numerical control (CNC) machine tools and software for industries requiring precision machining, including automotive, aerospace, and medical devices. Founded in 1968 and headquartered in Indianapolis, the company operates across North American, European, and Asian markets. The most notable development is the aggressive buying spree by executives starting in June this year. Officer Michael Doar purchased 3,000 shares at $20.40 per share on July 2, while President Gregory Volovic made a substantial purchase of 7,475 shares at $13.35 per share on June 11. This represents a significant investment of approximately $100,000 by the president. Doar's purchases are particularly noteworthy, as he consecutively bought a total of 11,000 shares from June 23 to July 2, investing approximately $194,000 at an average price of $17.66. This represents substantial buying activity while the stock traded in the $13-20 range. Conversely, Canadian investment firm Polar Asset Management has taken the opposite approach. Following two sales totaling 44,663 shares in October 2024, they continued systematic selling from February through March 2025. Notably, they sold shares at prices above $22.60 in February when the stock was trading at $22 levels, realizing profits. The stock's trajectory shows it started at $18.37 in June 2024, rose to $23.40 by late November, then plummeted to $13.91 in April 2025 before recovering to current levels around $20.50. Management's buying at these lower levels suggests confidence in the company's intrinsic value. The suspension of quarterly cash dividends announced on June 14, 2024, initially pressured the stock, but management explained this was to 'enhance financial flexibility and improve ability to manage market volatility.' This appears to be a conservative approach considering the cyclical nature of the CNC machine industry and recent manufacturing sector weakness. While the manufacturing automation trend supports long-term growth potential for CNC machines, the sector's economic sensitivity makes short-term performance volatility unavoidable. Current management buying at price lows suggests they believe significant upside potential exists when manufacturing recovers. Investors should closely monitor upcoming quarterly earnings alongside manufacturing PMI indices and capital expenditure trends in automotive and aerospace industries. If the stock continues rising following management purchases, it would validate insider judgment. Determining whether Polar Asset Management's continued selling represents simple portfolio rebalancing or fundamental concerns about the company is crucial. However, their sales occurred primarily during price increases, suggesting profit-taking behavior. Currently, aggressive management buying serves as a positive signal, though small-cap characteristics require consideration of liquidity constraints and volatility risks. Manufacturing recovery prospects and the company's next earnings improvement will likely determine investment success.