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ivan

Gunnar, there are several observations to be made about this post:
1- correlation != causality. You attribute the degradation of performance to effect of the breach, it may very well be attributable to other things, for example the economic "downturn" in the 2008-2009 period.
2- you consider the breach to be a cause rather than a result. It would be equally valid to think of the breach as a result of missmanagement and to consider missmanagement as the cause of the other negative indicators as well as of the breach.
3- the analysis would be more fair if you compared the same metrics over the same periods against competitors and the market's benchmark. In your first post you refer to an investopedia article for comparison, I think that does not suffice to support your analysis.
4- perhaps a more simple analysis would be to compare the Beta variations of Heartland and competitors over the same period

Gunnar

@Ivan

1. if you notice it was only the Bottom line that suffered NOT the top line, its pretty easy to see if you read the financial statements

3. I did in the earlier post on share price, it showed HPY dramatically underperforming both its peers and the market
http://1raindrop.typepad.com/1_raindrop/2010/11/heartland-revisited.html

4. Beta is a worthless metric for investing or anything else and a leading cause of the financial crisis.

Gunnar

just to add to my point #1, if we are looking at the crisis as a reason for underperformance, we would expect both the top line revenue and the bottom line to be impacted.

Instead we got robust top line growth and negative profits and Free Cash Flow. I think its pretty clear in this case from simply reading the financial statements.

VO

"if we are looking at the crisis as a reason for underperformance, we would expect both the top line revenue and the bottom line to be impacted."

It is pretty easy to have huge revenues and negative profits, think of dotcom times. Simply give cashbacks or the like. Run a marketing campaign on the Superbowl. Nothing to do with security, all with the cost of sales, which does increase in the economic downturn.

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