Q: Hi crew, could I get your quick analysis on Earthlabs? Sprott has some interest in the company. What results will the company need to get them to over a dollar a share? Thank you,
Kevin
Kevin
5i Research Answer:
Even with a 65% gain this year, market cap remains tiny at $37M. Insiders own 6.2%, Eric Sprott (via a holding company) owns 17.1%. It has lots of cash (nearly $70M) but a small revenue base, and losses. The company had very large investment gains in the last quarter. Advertising revenue rose 55%. It is an interesting company, and certainly seems mis-priced considering its big cash position. A $1.00 price would be a pretty dramatic move from 26-cents, but it is not beyond possibility. If we were in charge of this we would start paying a small dividend to get some retail investors' attention. It is interesting, certainly, but small, thinly traded and should still be considered risky despite the balance sheet.