For his second Executive Decision segment of Wednesday's Mad Money program, host Jim Cramer spoke with Tom Tomlinson, president and CEO of Holley Inc. (HLLY) , a maker of automotive performance parts for car and truck enthusiasts that is trading for less than 16x forward earnings.
Tomlinson said Holley is the company for people who love their cars and trucks and want to personalize them and modify them. The company has a long history of innovation and acquisitions that continually give customers new and exciting products, he said.
Holley also has a robust direct-to-consumer approach that reaches more than 15 million avid car consumers, Tomlinson said.
Tomlinson admitted that supply chain disruptions are an ongoing concern for the entire auto industry, but throughout the pandemic Holley has been able to overcome them and continue its growth.
Let's check out the charts and indicators of HLLY.
In this daily bar chart of HLLY, below, we can see that prices have rallied in fits and starts from July. HLLY is trading above the rising 50-day moving average line and above the positively sloped 200-day line. The trading volume was choppy from May to September but shows some steady movement the past three months. The On-Balance-Volume (OBV) line shows a modest rise from September but has been neutral the past four months. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but is close to crossing to the downside and a take profit sell signal.
In this weekly Japanese candlestick chart of HLLY, below, we see a mixed to potentially bearish picture. Prices are in an uptrend but recent upper shadows tell us that traders are rejecting the highs. The 40-week moving average line has a positive slope but the OBV line does not confirm the price advance. The MACD oscillator is in a bullish alignment above the zero line but it has begun to narrow.
In this daily Point and Figure chart of HLLY, below, we can see a nearby price target of $16. A decline to $13.18 will weaken the picture.
Bottom line strategy: I became interested in cars and engines long before I got my driver's license. I bought and read car magazines from cover to cover. I remember reading about Holley carburetors. A lot of history there, but we do not have a lot of price history to work with and what we do have is not all that strong. If we were to be buyers of HLLY it would be at lower levels, which I would anticipate will be seen in the weeks ahead.