Q: What are your thoughts as a turnaround play for a patient investor? Sell off seems a bit overdone.
Thanks
Thanks
5i Research Answer:
ENGH continues to have a lot of cash, and its shares have been hit hard with the AI software scare. Valuation is very cheap at 11x earnings and the dividend continues to be paid (and is supported by cash). We think it is getting interesting, as fundamentals have certainly not declined as much as the share price. But it is hard to gauge sentiment to software. ENGH has been cheap for sometime, and has become somewhat of a value trap. It needs a solid catalyst to get investors onboard again. We think it does have turnaround potential considering last week's decline, but investors are going to need some patience for sure with this one.