Eurocontrol Technics Ord EUCTF

RE:Chart Destruction

[shawshank]

kidl2 wrote:

This is imo one of these near perfect examples of a chart being destroyed for the wrong reasons. A pretty consistent 90-100% buy rating prior to the SICPA announcement clobbered down to 30%.

https://www.barchart.com/opinions/stocks/EUO.VN

Yes, some of it (a probably small portion) can be attributed to the markets in general but the lion’s share is clearly deal / surprise related. While the initial surprise based reaction is somewhat understandable thanks to the rather popular “Shoot first, ask questions later” concept, the prevailing weakness clearly stems from people not understanding that owning a small piece of a rather large pie beats owning a large piece of a small pie 9 out of 10 times.

This deal will open doors EUO/GFI could have never dreamt of opening …

In many parts of the world the concept of partnership, especially between “unequal” parties, immediately raises red flags as in “It's usually the little guy who gets screwed”. Germany per example, and Switzerland is identical, has a very different attitude towards partnerships. Maybe the best and certainly not widely known example is the typical and in many cases legislated participation level of Union representatives on company boards which btw, is not window dressing as is so often the case in N.A. It is designed to create a true partnership between the “big” and the “little” guys and it works very well as evidenced in the rarity of strikes, walkouts etc.

What gets lost to many as well is that SICPA ALREADY has established itself thru contractual status in over 200 countries GLOBALLY whereas EUO has only established themselves where they currently have Petromark operating under contract; and because Petromarks customers/clients are government based or governement agency basedthe tendering process is a litle more onerous then business to business because of the levels of bureacracy involved to become the successfull tendor...tradeoff being the contracts typically are long term in duration....but SICPA alreading having gone thru the government tendering process and been successfull and historically and currently established as a preferred vendor in over 200 countries?-will expedite the bidding process for Petromark in so much more an advantageous manner that it would experience going it alone...country in need of tag and track GFI service after country in need....and inheriting all the sale and marketing costs associated that would have come with it offsetting net income in the process.

WHEREAS the $1.5million per annum in minium royalty payment from SICPA is all earnings in entirety with zero sales and marketing costs involved as they are all born by SICPA...and no one can dispute or argue and debate that fact-cuz its just that...fact.

And that minimum annual $1.5million royalty payment equates to an entire .016 to EUO"s bottom line earnigns...if they see $3million in royalty payments it will equate to .032 in net EPS...and so on and so forth...so while its out there developing its final commerical product for the Semi-Conductor sector and going live in early 2016?

Company will still be toting along remaining profitable from operations.

Gotta love it.

NB as we start to near the 30day limit for the LOI to move to DI status-i expect in the interim Rowlands will ratchet up the volume
on what this deal does for EUO..why it was done when it was done-and how shareholders and the company will benefit on ROI going forward.

Given the upfront cash anything IMO under .17 is a gift-of getting the shares of what it would pay out in cash alone following closure.

SS