Disrupting the status quoAs I mentioned in my last post, EnWave has several institutional brokers following the company, one of which has written several reports concerning ENW. In the initial and quite extensive analysis, the firm states that EnWave has a “disruptive technology” that can in fact replace freeze drying in many (or most) circumstances. Interestingly EnWaves technology is so much cheaper to purchase, and operate than the traditional freeze dryers that ENW is able to charge an ongoing royalty for use of its patented systems and machinery and still leave the end users with far higher profit margins and equal or better end products.
The aforementioned securities company thinks that with this royalty, combined with an increasing market share in just one of the several areas that EnWave is targeting, a market capitalization of $300 Million is possible. If however the company succeeds in all three targeted areas, this could triple (based on a 5X EBITDA multiple).
I am a believer that EnWave’s technology is a little too disruptive, and that a joint venture or total buy out will happen in the next 24 – 36 months. The technology is too simple and too effective for a very large company not to see the obvious financial benefits, and too well protected by patents and a professional serial entrepreneur to wait and hope that it can be bought for fire sale prices. No, those days of risk don’t exist like they once did before John McNicol was writing the cheques. This is a winner in the long term, has increasing volume and a nice strong chart that is ready to break to the up side!
Trade Smart, Invest Well! (from an informed position)
Mike!