Enteq Technologies Share Discussion Threads

[rivaldo] 12/5/2020 16:19

Crazy amount of buying activity going on at present :o))

[jeevsje] 12/5/2020 13:37

Rerate on. Back to 20s shortly. Not many shares in issue.

[swizz] 12/5/2020 13:32

There was a notable change on RSP an hour or so ago, it looks as if Investec decided to take out the remainder of the line, ....GL S

[rivaldo] 12/5/2020 13:29

There is now - 369k traded so far today after 188k or so of buys.

[jeevsje] 12/5/2020 10:38

No buying volume to flush the seller today.

[swizz] 11/5/2020 19:32

j, yep, it certainly looks that way and I will probably look to add a few more tomorrow,...GL S

[jeevsje] 11/5/2020 17:40

Another 113k trade at the end. The guy has approx 69k left. We can absorb that tomorrow and then rerate starts.

[swizz] 11/5/2020 12:27

Just added a few more today at 11.35, if it is indeed the member of staff turning over the circa 350k, this should hopefully clear fairly quickly and this aside the register looks reasonably tight, so on a longer term view, this looks like a decent level to start building a position,....GL S

[swizz] 08/5/2020 06:18

A member of the management team were issued shares at 1p a few days ago, perhaps they are turning it over in the market for a quick return?,....GL S

[jeevsje] 07/5/2020 20:28

The 175k sale was holding things back. Who is the seller?

[1gw] 07/5/2020 19:58

Well done Enteq. If they can establish themselves as the go-to service company for high reliability MWD kit in China, and China decides to support its shale sector through the downturn for strategic reasons, then they might be able to make up for quite a bit of lost US revenue. Especially if they can package the MWD with some of their other kit, which they seem to have done here.

[cjohn] 07/5/2020 19:55

1 million dollars, not pounds.

[jeevsje] 07/5/2020 15:56

Significant contract award of £1million.

[1gw] 06/5/2020 13:52

I'm just using it as a proxy for fire sale/wind-up value of the company at this point in time. If they decide tomorrow that it's all hopeless given the oil price outlook, how much of my investment might I reasonably expect to recover? I reckon I'd get most of the cash value back, and almost certainly (again in my opinion) the cash less the liabilities.

As time goes by and they use up that cash then clearly that "safety net" value may go down - although if business falls away then I would also expect liabilities to go down as those customers that are still solvent pay their bills.

On a going concern basis the cash should be generating a return (over the longer term) equal to the cost of equity (which for a company like NTQ should be relatively high I would have thought) or they might as well give it back to shareholders. But that's a different calculation.

[jeevsje] 06/5/2020 12:31

You need to discount the cash in the cals. How much it is discounted is a function of how they intend to utilise the money to trigger growth.

[1gw] 06/5/2020 12:13

Right, but by my calculations they had about 12.5p/share cash at 31st March ($10.2m at today's rate of £1=$1.24 and the 20th May shares in issue of 65.8m).

We don't have the rest of the balance sheet yet for 31st March, but if I look at the 30th September balance sheet it showed $2.9m intangibles and $5.3m inventory. So most of whatever that would have become at 31st March presumably has gone in the write-off.

So that would leave, on the 30th September balance sheet:
+$5.4m Property Plant & Equipment
+$2.3m Trade & other receivables
-$2.3m Trade & other liabilities

The first item may be vulnerable to material write-down as it includes the undepreciated amount of the rental fleet (I think). And clearly there may be a risk on the receivables given the stress in the US shale market.

But even if you wrote off all of those assets to leave just the $2.3m liabilities and deducted that from the cash, that would be $7.9m ($10.2m cash less $2.3m liabilities) or around 9.7p/share.

[no advice intended and apologies if there are any errors in the above - dyor]

[jeevsje] 06/5/2020 11:48

The following will scare quite a few guys, write off of almost $7million. I know it is non-cash but still.

Due to the recent reduction in demand from the North American drilling market, combined with the future market uncertainties, Enteq intends to include a significant non-cash write down in the carrying value of both the intangible assets (capitalised research and development projects) and inventory holdings in the final reported accounts for this period. The total balance sheet (non-cash) reduction in relation to these write downs is expected to be approximately $6.9m.

[1gw] 06/5/2020 11:32

And bought some more, at what I think is below cash. They are likely to consume some of the cash they have of course, but feels to me like a good way of positioning for an oil price recovery with a reasonable amount of downside protection.

[jeevsje] 21/4/2020 12:48

Could well go below 8p, based on exposure to fracking in the US and WTI shenanigans. They will need to show that they are rightly investing the remaining cash balances.

[garth] 15/4/2020 08:42

I cant see these holding even these levels if oil stocks tank again. It will be interesting to see how this week plays out. I am keeping an eye - but not a buyer yet. I am not going to bet against them hitting 10p in that scenario.

Holding a core of Shell which I expect will be hit and will look to add to that if we revisit levels of several weeks ago - or worse.

Just a view.

G.

[dangersimpson2] 11/4/2020 11:03

I take a look at NTQ in the following talk on UK Net Nets:



A lot to like, but watching until the current cash outflow becomes clearer, and how much of their US shale receivables/rental fleet customers make their next payments.

[1gw] 09/4/2020 15:34

Bought more this afternoon. I reckon they still have around 12p/share cash at 31st March. Now they've taken the write-downs on inventory and capitalised R&D, the main near-term downside is perhaps writedown risk on the receivables (which would effectively eat into cash).

I liked the proactive interview, with its suggestions that there is further growth potential in China in particular. It seems that with the cash holding this really looks like a very cheap option play on the upsides (either success internationally or a US oilprice-driven recovery). And in a way it is hedged given its Chinese, Saudi & Russian potential sales in a volume game (price war) versus its US potential sales in a price game (Opec+ or Opec++ production cuts).

[rivaldo] 09/4/2020 12:14

Indeed Mas. Just a question of time and patience.

New research note on Proactive, with some interesting conclusions:



"Enteq has also indicated that it will continue to invest in selected engineering development projects. One important programme is the Rotary Steerable Drilling system being developed under a licensing agreement with Shell. We believe that the expanded product base could enable Enteq to significantly exceed its FY Mar 2020 revenue run-rate once market conditions allow.

Cash position, valuation

The strong net cash position on Enteq’s balance sheet (US$10mln) is an important element of the investment proposition in our view. We believe that with its reduced cost base, the company will be able to trade through a very depressed revenue environment in 2020 (and 2021 if necessary) without needing to access fresh capital. We believe that some industry peers may prove less resilient, which could alter the competitive landscape going forward.

The shares now trade on an enterprise value (EV)/sales multiple of 0.24x (using trailing Mar 2020 revenues). While the market may be sceptical about any kind of valuation metrics applied to the energy sector at present, we believe that this multiple implies substantial upside potential for Enteq shareholders once the energy market enters a recovery."

[masurenguy] 08/4/2020 16:48

Market cap at the close today was £8.8m. Cash balance at March 31 was £8.2m so the business, including intellectual property and forward orders, is valued at only £600K !