What is their business model. Are they cash flow positive. Can their business model last over 10 years. Do you see the company start a buy back program and dividend.
In advance, thank you for taking your time to answer my questions.
Enterprise is a consolidtor of specialized equipment rental services, mostly serving the energy and resource sectors in western Canada. It is a small ($105M market cap) company with a decent forward P/E of 14X. Its price recently witnessed a large one-day decline following its earnings release, and several analysts cut their price targets on the name. It just announced a buyback program for up to 5.62 million shares from April 2 for one year. It is not cash flow positive, but it is profitable and has a good balance sheet with a solid cash balance of $34.1M. Sales growth has been good, and certain profit metrics are moving in the right direction, but it is a small company, and so while we think it has staying power, it is much less certain than a larger peer, like TIH. We do not believe E will initiate a dividend.