Enteq Technologies Share Discussion Threads

[woodcutter] 16/1/2015 09:55

As you know i've been in cash most of last year, it was flat for me, no return.
Can't complain had a good few years before that.

I traded a bit last year but not much, some success some failure, not by bag really, but i'm going to give it more effort this year.

I've started to come back into the market with a mixed bag of mid caps and the odd small cap. I pretty much sold everything first qtr last year however I still have a sizeable holding in ANP with smaller holdings in ESC, SBS and SPRP (thanks to GHF).

Over the last few months i've added ALNT, XPP got a few of both of these now.

Recenltly added to holdings BPI, RPC on the plastics/Price of oil fall. Had a few DX. as Giles Hargreave is in there. All these are very small though.

in and out of CBG, LRE and KGF can't make my mind up:-)

NTQ my first big drop for years but i've only got a small holding.

Dabbling really rather than investing.

No chance of top four, Rodgers looking vulnerable imv. Talks the talk but can't walk the walk, i think. Suarez and sturridge missed badly, perhaps only thing getting him off the sack.

I travelled a bit last year and took several months out in the summer playing golf, it's my major pastime alongside this. (not posting much at all during the period)

will keep any eye on your posts.

Cheers Woody

[simon gordon] 15/1/2015 22:00

Hi Woody,

Mainly in Retail Bonds. Share wise quite like QP. and KBT as early stage growth stories.

Scouse Mouse seriously missing Suarez. Don't think they'll make top four.

Are you buying/holding many smallies?

[woodcutter] 15/1/2015 21:36

Simon

If you don't mind me asking are you still mainly cash or have you started buying...............an LFC season ticket for next year maybe?

Woody

[woodcutter] 15/1/2015 20:37

having spent years working in capital projects in the engineering sector before retiring i've experienced these cycles a number of times and the usual pattern in any engineering sector is always the same; massive capex reduction, just about every penny of spend gets scurtinised to the nth degree, head count gets over cut on the basis that sales will disintegrate.

This goes along merrily for the cycle length, which is variable, then something changes, in this case POO goes up and it will climb steadily. The usual outcome is that there's been a year or eighteen months of complete under-investment in the sector and then everyone wants everything yesterday and capex spend goes bonkers!

In the meantime the technology has been steadily improving and no ones been buying it so everything the clients are currently running is dated and you get an explosion of orders.

No ones asking whether to spend or scrutinse whats being spent, they just want it now and don't care what it costs.

If NTQ can stay solvent for the duration of the cycle then there is still potential in the business so i wouldn't write it off just yet. I tend to think these are times of great opportunity to extend your sales contact based and client relationship build for the inevitable turnaround.

aimho.

[mega_trader] 15/1/2015 18:44

Shalegas unaffected in other regions. The UK will at some stage go full on too.

Opec will reverse it's stance once other mena oil producers start to fall short on their national budgets due to decreased revenue, they don't want another arab spring do they.

It makes no sense for opec to overproduce, they want as much $/pbo as pos, shale will start up again at the first sign of a cut, like popup shops.

6 months from now you'll be kicking yourselfs for not buying, just as oil climbs or they get bought out ... at a premium!

[paleje] 15/1/2015 16:25

Amazing how a broker can issue 65p one day and 25p a couple of days later, what did they so abysmally fail to read....the US shale market in general or NTQ in particular? Either way, or a bit of both, with their resources and supposed industry expertise, they shouldn't get it that wrong.

I suppose if you take the view that US shale is in its death throes the future is bleak but I don't think that's the case, why would the US capitulate and give it all back to the Saudis. More likely through efficiencies and technology improvements they'll make it cheaper to produce, possibly government concessions too. Question is how long and how will NTQ fit in.

[battlebus2] 15/1/2015 13:54

For what it's worth there's a couple of broker targets this morning, Investec still a buy but target reduced from 65p to 25p and Finn cap have a hold with their target price falling from 51p to 25p also.

[p1nkfish] 15/1/2015 12:32

It's a gamble for sure. Reduced a while back so have a nominal holding but want to see them do well and swim against this tide.

[simon gordon] 15/1/2015 12:01

Best thing might be for NTQ to sell their tech/ip to an oil field services company, wind up the company and return cash to shareholders. Shale story in US has structurally changed with Saudi move, less capital chasing drilling. Story looks stuffed. They could limp on, slowly bleed reserves, equating to a share price as dead as a duck.

They're ducked.

[prop_joe] 15/1/2015 11:42

By my calculations 30p is below the last reported net asset value excluding intangibles and goodwill. It would though of course be a huge premium to the current share price.

[paxman] 15/1/2015 11:07

p1nkfish, remember the share price fell 70% whilst oil was over $100 and industry demand for Enteq type products was strong. Enteq's board successfully sold an IPO story at a high price but investors were on the wrong side of that story buying in 2011 at 100p. Enteq's story at IPO was Sondex. Sondex listed at 100p in 2003 and was bought by GE at 460p in 2007 which was similar to the increase in the oil price over that period. Enteq management's 'good job' at a 'maximised price' in time was at the expense of shareholders. Our only possible relationship with Enteq is as shareholders.

The only upside potential going forward is for Enteq to significantly reduce admin costs so as to be cash flow positive in the current environment and hope the oil price and demand recover. Then sell the company at 30 p a share to a corporate playing the oil price upside.

[p1nkfish] 15/1/2015 10:19

management have to deal with their market. I wouldn't have bought this anywhere near ipo price as they raised at the peak. they did a good job raising then, maximised price.

have to see what happens as cycle turns, sometime.

[paxman] 15/1/2015 09:35

p1nkfish, they've already shown what they can do. The company's value has fallen 90% since listing a few years ago.

They have zero say on the oil and gas price. The only positive thing they can do is cut admin costs substantially. So we'll see on that.

[firtashia] 15/1/2015 09:34

This one reminds me of an old girlfriend :-). Lesson for me is that cash in hand doesnt act as a floor for the share price, it can go as low as sellers want it to go. Will watch and wait till some signs of recovery in the O&G sector. If I miss it, I miss it.

[paxman] 15/1/2015 09:31

mega_trader, you might well be right on OPEC cuts. They need $70+ oil to keep their subjugates happy-ish.

This oil price shock should have cut off new capital into the US shale industry which it needs due to high well decline rates. So OPEC have already put higher cost US shale out of business.

But Enteq is the wrong way to play an oil price rebound. Buy an ETF instead. You don't get the high admin cost drag you get with Enteq.

[p1nkfish] 15/1/2015 09:25

Time for mgt to show what they van do. Testing times, they have a good team.

[paxman] 15/1/2015 09:21

p1nkfish, you mention Enteq management's last company ( Sondex). The bad news for Enteq's shareholders was this was built up and sold during the great oil and gas price rises leading up to its exit in 2007. So they were successful there - company value wise - but with Enteq they're operating in the opposite environment, oil and gas prices falling.

Enteq has been a leveraged play on energy prices due to high administration costs relative to its gross profits so shareholders are left with the stub end of the value after company employees and directors take their cut.

Positives - they've maintained cash since September at $14 m. Also costs are being looked at. Maybe the fund which bought in big recently had a look at the books and are putting pressure on management to cut costs.

On has to wince at these investment shops touting high share price targets and also their timing. Investec's 64p of a couple of days ago! All analyst share price targets should have the disclaimer 'A lot of the time we are completely wrong. We need commission to live. In our industry we talk our own or a favoured client's book from time to time so be careful.'

[mega_trader] 15/1/2015 09:20

Fall overdone imo, opec WILL cut production this year, restoring the balance. Easyist 100%er on aim imo.

[1gw] 15/1/2015 09:12

I was hoping most of the bad news was already priced in. Obviously not. Am a bit surprised that they've had to warn for this year - I thought it was looking as though the cuts wouldn't really bite until next fiscal year.

Have to hope they're on someone's shopping list, or else we get a reasonably quick bounce back in oil prices.

Clearly plenty of recovery potential given the current cash balance vs market cap. Interesting reference to working capital on the balance sheet - hope their customers are still good for the money.

[woodcutter] 15/1/2015 08:57

well they've obviously been able to reduce the receivables and balance the working capital to maintian the cash at $14m as per the interims.

Looking forward if they do around $20m revenue at the current gross margin of around 40% then they'll deliver around $8m with admin costs in the region of $9m assuming some cuts in overhead they'll make a loss of $1m or there about.

Doesn't look good and next year will need some very good financial and sales management. I guess the big question now is can they ride out the storm and get the business back on track.

The key is being able to retain the cash levels so we don't have a further placing.

aimho

Woody

[paleje] 15/1/2015 08:00

Not sure what 'substantially' means but probably exceeding 20% and of 2014 sales. Worse than I expected.

[skyship] 15/1/2015 07:47

Hmm - might trading losses erode that cash rather rapidly. So much unknown now; but if they come on offer at 10p I know I'll be tempted back in as a pure spec.

[p1nkfish] 15/1/2015 07:38

They are certainly being tested. See if they can maintain the $14m. Sounds like a line in the sand.

[alan@bj] 15/1/2015 07:23

$14m cash and a pre-open market value of £10m. Could well go below cash value on today's news.