This article is authored by MOI Global instructor Matthew Sweeney, founder and managing partner of Laughing Water Capital, based in New York.

“The time other investors spend delving into the last unanswered detail may cost them the chance to buy in at prices so low that they offer a margin of safety despite the incomplete information.” –Seth Klarman

Hill International is a global provider of asset light construction management and consulting services, with 47% of 2017 revenue from the U.S., 35% from the Middle East, and the balance from EMEA, LatAm, APAC, and Africa. Unlike a general contractor that has to bear the cost of overruns, HILI generally operates on a cost+ basis, providing information and advice in order to avoid problems before they blossom.

With an activist campaign to remove the founding family from the C-suite already complete, a division sold to shore up the balance sheet and simplify the business, a cost cutting plan underway, and rampant M&A in the space at premium prices, there are a lot of moving pieces that could explain HILI’s mispricing. However, the most notable piece is that HILI – formerly HIL – was delisted from the NY Stock Exchange in August, which caused shares to tumble ~30% over night.

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