What happened to ENGH. I thought they had a good earnings report?

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Asked on December 18, 2020 9:06 am
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Hi Dan, I hope all is well. Despite the high valuations, do you still think this is a good pick. I know it was highlighted as #1 on one of your lists for non-premium members....it might have been before the run-up though. Thanks so much!

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Posted by Vanessa Grass
Answered on December 18, 2020 11:59 am
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It's a strange reaction to what I feel is a strong quarter.

In fact, the company announced a special dividend of $1.50, due to its strong cash position and zero debt. This is almost triple the rates of its normal annual dividend. You'll have to be a shareholder as of January 15th 2021 to get it. But, that is a big chunk of change for a company who typically only pays out 1/3 of this on an annual basis.

To add to that, the company claims it still is in a very good position to fund acquisitions even with this payout.

The company posted some pretty strong quarterly results. Valuations are still high with the company trading at 30X forward earnings, but considering year over year it posted 30.6% revenue growth, 39.2% net income growth and 53% adjusted EBITDA growth, I'd say it satisfied that valuation over the fiscal year.

It missed revenue estimates by a decent chunk, so that could have been what caused the drop. But as a shareholder I wouldn't be too concerned.

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Posted by Dan Kent
Answered on December 18, 2020 10:54 am