As Enterprise Group Inc. shares steadily improve, expert Clive Maund reviews the latest updates with the company, including news with its wholly-owned subsidiary Evolution Power Projects Inc.
Not much has changed technically since we first reviewed Enterprise Group Inc. (E:TSX.V) in June a few months ago. However, its technical condition continued to steadily improve as it moved towards the completion of the bullish ascending triangle shown on its last 1-year chart, and its 200-day moving average continued to catch up with the price.
The chart shows the stock’s picture in a steady uptrend that paused for a rest from its February highs to allow its moving averages to catch up. During this time, the fundamental situation of the company improves considerably, from loss to profit, in particular thanks to the particularly attractive and convincing services offered by its 100% subsidiary Evolution Power Projects Inc., which we will briefly examine later. down the page. .
On the one-year chart, we can immediately see how Enterprise Group continues to advance in a steady uptrend and only paused to consolidate when the broader market crashed in the spring. He has been stalling for over six months now since early February, which has allowed him to “recharge his batteries” for the next upleg which will likely be triggered by the next earnings release which is expected soon, probably within a few days. . weeks.
Technically, an upside breakout is soon suggested by the rising regrouping of the price and its moving averages aligned upwards and the closing of the bullish ascending triangle.
The 12-year chart, of course, looks pretty much like when we first looked at it and is interesting because it shows price being slowly guided into a major breakout by a giant saucer base pattern, and it’s worth noting that with 47 million shares outstanding, the price isn’t holding back due to stock dilution and so it could really take off once it manages to break out of that giant base.
The president of the company is supposed to own 12 million shares, which means there are far fewer shares in the float.
Now we come to the big reason why the company is doing so well fundamentally, not covered in the first article about it, which is why the outlook for its stock is so bright.
One of the biggest headaches for oil and gas explorers in Canada’s northern wastes and elsewhere is trucking large amounts of diesel fuel, often over great distances, to power on-site generators. It’s getting more and more expensive and definitely not ‘green’ as the generators on site create a lot of pollution and noise.
Enter Evolution Power Projects Inc. with its powerful generators that use natural gas. At a time when diesel has become much more expensive with possible availability issues in the future, this has huge benefits for oil and gas explorers, as there is no longer a need to haul thousands of liters of diesel per truck, as a single Evolution Power Projects unit has the capacity to replace up to 15 diesel generators and in addition, the natural gas to power the Evolution Power Projects unit is often produced on-site at further drilling, resulting in even greater savings.
Unit rentals are apparently skyrocketing as the idea gains traction, and the massive turnaround in Enterprise Group’s fortunes, largely seen as the result of skyrocketing unit rentals natural gas power generation units from Evolution Power Projects, is evident when we compare the Enterprise Group’s loss in 2021 to its sizable profits in the 1st quarter of this year.
Other positive factors that we should consider include the fact that even at the liquidation price, the company’s assets, which are appraised twice a year, are worth CA$0.72 per share, which is significantly more than the current share price.
In addition, a large LNG (liquefied natural gas) port facility is being built off the coast of British Columbia, which should be very useful for a considerable number of Enterprise Group customers.
So it seems likely that the improvement in corporate group earnings will continue and become evident with the next set of results to be released soon, which should generate a breakout to the upside, and so we remain long, and that’s is a good point to buy or add positions.
Business group website.
Evolution Power Projects Inc website
Enterprise Group Inc. closed at CA$0.395, $0.314 on Aug 10, 2022. The stock is fairly lightly traded in the US OTC market, but volumes are expected to improve as the price rises and rises.
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The foregoing represents the opinion and analysis of Mr. Maund, based on the data available to him, at the time of writing. Mr. Maund’s views are his own and do not constitute a recommendation or an offer to buy or sell any securities. Mr. Maund is an independent analyst who receives no compensation of any kind from the groups, individuals or companies mentioned in his reports. Because trading and investing in all financial markets can involve serious risk of loss, Maund recommends that you consult a qualified investment adviser licensed by the appropriate regulatory bodies in your legal jurisdiction and make your own due diligence and research when doing any type of transaction with financial ramifications. Although he is a qualified and experienced stock market analyst, Clive Maund is not a registered securities adviser. Accordingly, Mr. Maund’s market and stock views may only be construed as a solicitation to buy and sell securities when subject to the prior approval and approval of an advisor. in registered securities operating in accordance with the appropriate regulations in your area of expertise.
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