Saturday, July 13, 2024

Enterprise Group (TSX: E, OTCQB : ETOLF) Earnings Exceeded Expectations And More to Come

Date:

When you finish reading this article, you may well kick yourself. The good news is that the Enterprise Group, Inc. (TSX: E) (OTCQB: ETOLF) growth is just getting started. While hindsight is 20/20, the future looks very bright for this consolidator of energy services (including specialized equipment rental to the energy/resource sector), including one of the first companies to build and release systems and plans to drastically lower GHG emissions of resource companies. (Opened in Apr 2022).

Cool as that is, it isn’t the good part the graph below shows the price growth of Enterprise (orange line on the graph below) over the last two years against all the major indices (group like a rainbow at the bottom).

If you bought the shares a couple of years ago, congrats. The second-best time is today.

I will give you the most up-to-date info and stats. If you don’t come out with a positive attitude about the shares, I can’t help you.

I will list the salient reasons why a little (or a lot) of the Company should be in your portfolio. Over and above the fact it smoked the major US Indices.

These points will be in some order, but all are powerful forces to grow the Company.

  1. The shares closed on Friday, May 26th, 2023, at CDN 0.475 cents—a 52-week high.
  2. If you bought the shares two years ago, they cost around CDN 0.20 (Returns later).
  3. FY 2022 Earnings of CDN 0.05 (Next fact is impressive)
  4. Q1 2023 Earnings of CDN 0.06 a share.) 
  5. To date, the Company has purchased and canceled nearly 11 million Enterprise shares at an average cost of CDN 0.24
  6. ENTERPRISE management puts much time and effort into the company’s growth, mainly for its shareholders’ benefit.

For more context of most recent earnings (and for those more visual investors among us) announcement’s power, comparing Q1 2023 to FY 2022 is productive.

FY2022 Numbers

Revenue: CA$26.9m (up 44% from FY 2021).

Net income: CA$2.28m (up from CA$2.38m loss in FY 2021).

     Net Profit margin: 8.5% (up from a net loss in FY 2021). The move to profitability was driven by higher revenue.

     EPS: CA$0.05 (up from CA$0.049 loss in FY 2021).

Factors That Will Drive Future Growth. A Lot.

  • The oil and gas CAPEX market size was around USD 502 billion in 2020, and it is anticipated to reach around USD 942 billion in 2027, registering a CAGR of around 8.1% during the forecast period 2022-2027…Hence, to meet the strong global demand for crude oil and natural gas, more investment is required for exploration and production activities, which in turn promulgates the CAPEX in the oil and gas industry. (researchandmarkets.com)
  • The BC government breached the Treaty Rights of the Blueberry River First Nations, says a new provincial court ruling that could have sweeping implications for oil, gas, forestry and hydroelectric development in the northeastern part of the province.” (Narwhal)
  • With a stellar reputation, personal relationships with nearly all the resource companies in Western Canada and a stated plan to work with clients to reduce and eventually eliminate GHG emissions, Enterprise is in an excellent and virtually peerless position to benefit from The Blueberry/BC Supreme Court Decision.
  • Enterprise’s senior officers, including CEO and President Leonard Jaroszuk, have embarked on a cross-country tour, visiting investors, financial professionals and others involved in the capital markets to emphasize the growth and potential of the Enterprise.
  • Given the rise in Capex spending and the growth of the resource industry as the ‘Green Economy’ gets underway over the next several years, Enterprise is in the ‘sweet’ spot.
  • The reality of energy production growth represents several things. First, as Green Tech develops, a growing supply of fossil fuels globally will be needed. 
  • Resource companies and suppliers such as Enterprise Group will need to continue, with its peers, to create the most benign (and ever more relevant) GHG mitigation production technologies and processes.
  •  Oil and Gas CAPEX spending growth over the following years also bodes exceptionally well for the oil and gas service sector. From resource technology company Schlumberger:

Bottom Line

When shareholders and investors dive into the Company’s advances, they will note the following.

  1. Enterprise’s client base constantly grows, including several Tier One companies added in 2022
  2. Uninterrupted annual Cash Flow; a portion used to buyback market shares
  3. Response to Evolution Power Projects has exceeded corporate expectations.
  4. Offer clients custom technologies to reduce Greenhouse Gas (GHG) emissions.
  5. Blueberry First Nations opens a vast opportunity to add significant business.

Here are the in-depth information assets.

Research Assets

Fundamental Research states that the Company blew through its previous estimates, raising its fair value from CDN1.02 to CDN1.12.

The latest Corporate Presentation is here

Latest Podcast

Enterprise Group Inc.’s Desmond O’Kell lays out the company’s successful business model in the Company’s most recent podcast.

YouTube Channel

It’s YouTube. 

After reading all the foregoing facts, if you aren’t moved to pick up some shares, as I said at the outset, I can’t help you.

Bob Beaty
+ posts

For over 30 years, Bob Beaty has been explaining concepts and companies to the global investment community. One of the original writers for Jim Cramer’s Thestreet.com, he also wrote for AOL (Can/US), the Globe and Mail, and the Huffington Post. Over that period, he illuminated small-cap companies to investors with wit and pith but mostly opinion and facts. Investing should be fun. Pedantic, staid content is no fun.

Before embarking on his writing career, Bob had a successful international journey in the finance industry. He served as a broker, derivatives product manager, and a Director of London's Credit Suisse subsidiary. His career spanned across major financial hubs including Toronto, Vancouver, and the UK, giving him a unique global perspective. (He is still fondly remembering those English client lunches.)

Other than everything Groucho Marx and George Carlin ever said, Bob lives by a simple credo;

‘Never do anything the person standing in front of you can't understand.’ Hunter S. Thompson.

Let’s go.

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