Small Cap Stocks Down Under 27 January 2023: Humm (ASX:HUM)

There are hopefully not too many companies our readers will dismiss just by seeing the name, without even reading the article. Humm just might be one, however. Obviously, as a company that offers BNPL services, it has been battered by the Tech Wreck of 2022 – albeit not as badly as other companies, such as Zip (ASX:Z1P), given it has a profitable consumer finance business, not to mention a commercial asset finance division that is likewise profitable. But last April’s attempt by Humm’s management to sell the consumer business Latitude Group (ASX:LFS) did not help its cause. We think investors have taken the sell-off too far, to the point where it is trading at a ~30% discount to Humm’s NTA. Particularly given that 9 months later, there has been a major board refresh and a rationalisation of the consumer business.