Management has had lots of success with prior companies, but has struggled with growth at ENGH. In its early days, there was a premium for management, and without growth as expected this impacted the valuation and the stock's returns over time. 10-year return is now negative. We do not know why the company has been so reluctant to spend its cash. It has had too much cash for far too long. A growth acquisition would be a good catalyst, certainly. Insiders do own 22%. The share count has not changed much but it has not gone down significantly with buybacks, either. The tech sector of course has been very strong, but its particular niche has been less robust. ENGH is focused and is proud of its profitability record, so its less-aggressive growth stance has kept it a laggard versus faster-growing peers (who may be unprofitable). We think it is OK, but now it is more OK for income. A takeover/privatization may be possible as we are sure management is just as frustrated as public shareholders. We think in tech CLS looks better, as do the CSU group of companies (CSU, TOI, LMN).
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