Absolutely, just look at the pipeline of customers who have signed up but are yet to go live. Not forgetting the expanding network of countries signed up plus the backing of the World Bank. The Bank of America deal alone was a game changer. Don't invest if you don't agree, but I've doubled my money on this already and the SP has been stagnant for a while, just like it did before the last time it massively re-rated. If you snooze you lose!
17 Apr '15
Sorry guys, I’m having real trouble understanding why this company is a 'game changer'. The model is simple but, in essence, it does EXACTLY the same job banks currently do. If Earthport is to work, the company needs to be huge. It relies on all banks using the same model. As it stands, only a hand full of banks operate on this model, there’s loads of work to do. I’d argue Hank Uberois’ holding is incredibly small. (Only 5.19% holding from HU Investments L.L.C and 3.02 from Hank Uberoi) At the market cap of 218.03M, why isn’t he increasing ownership? A director at this level should be investing heavily in his own product, especially via HU Investments. In the Bloomberg interview they ask him to make a case for his company. If you listen to what he says, he just says the old system is old. Looking at the income statement June 2014 you see revenue has increased and the loss before taxation is lower than the previous year, this is very well. Under analysis however, you see the real value comes from the unrealised fair value adjustment. The percentage of gross profit remains flat lined at approximately 75% for both years. If you take out the accounting adjustment of £2 million you see no real improvement year on year. (in my opinion, a cause for concern). Good will and intangible assets make up over half of the total non current assets. Looking further into equity you see the stock has been diluted. Management aren’t growing the company organically. 15 million in assets (a majority of this intangible) and a market cap of £218m, it just looks overvalued (price to book value of 15.5 times). The fact directors aren’t topping up their holding suggests they believe it is too. Personally I see some potential in the company, but these quick anomalies put me off investing. I haven’t looked into the notes or spent a significant amount of time on analysis, only a few minutes. I’m also new to LSE and am an amateur investor (21 years old with a small portfolio) so please be kind.
13 Apr '15
Hoping to break the 50p barrier this week
9 Apr '15
Excellent week so far for EPO - on no news. I wonder if we're going to see another crack at 50p? The graph looks interesting - been tracking sideways in the 40-45 range for months now so a breakout is overdue. And this is going the right way.
24 Mar '15
Hi CO Interesting thoughts, and yes the interims were very positive. The business model is relatively simplistic in its nature and that is what I like about EPO, and the space in which it is trying to work. The toughest "nut" to crack will be Europe with its archaic and bureaucratic way of doing things simply to preserve its own status and sense of superiority. Cost control will always be an issue, but as long as cash burn is kept under control and there is adequate free cash flow and low debt. In relation to being taken over, would have been more financial and economical sense to have done so when it was at the 20-25p stage? With regard to technology, its so fast moving, and the key would be to at least remain on par with the rest and the competitive advantage gained via its product differentiators compared to its competitors. As long as EPO continue with is land grab of this space, gaining further momentum and traction.
24 Mar '15
I've been a fan of EPO for some time. Hank Uberoi is ex Goldman Sachs and he has turned this company around into an international payments firms supplying services to international financial firms. The last interims seemed to indicate they have momentum and the forward customer pipeline looks very strong.The point about this kind of tech service is that once you reach breakeven then any increase in business improves profitability margins. I believe we're very close to that b/e tipping point. The fact that Blackrock's bought over 5 per cent is also supportive. Look out for new customer sign ups for SP prompts. THree potential dangers: one - not enough cost control, two - they get taken over while still cheap and three - leapfrog technology makes their systems redundant. I don't think that last one is likely to happen for some time yet i.e, 2-3 years.
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