Analysis of EUO I have never posted in Stockhouse since few days ago. I bought after did my DD but I was very disappointed with the lack of news since I was noticed by EU that the DECISION to change the solvent yellow was postponed at December 30th of 2016. That DECISION should have been impacted on Xenemetrix revenues with SICPA (5% of gross revenues). Then, I just wanted to check how was this sentiment board, with some shareholders' thoughts. I’ve been written my thoughts about it. Everyone feels free to write their thoughts with respect. To me, this is a SELL recommendation until current MANAGEMENT speak about the guidance of EUO. It’s just my opinion. Other posters still think it’s a BUY, and I wish to know why. This is only a board.
My take is that: If Xenemetrix only sells between $250,000 and $350,000 every quarter, it cannot be a BUY signal while:
a) Management Expenses are above $200,000 quarterly, and
b) Administration costs are around $200,000 too.
This is the average amount, and I can do a model using these numbers to how many revenues EUO needs to be profitable. I can understand that with GFI, these kind of expenses were correct, but without it, EUO is selling no more than $1,2MM per year (only 10% of its current market cap) with "detectors and others" (called operating revenues) now from $1,9MM in 2013.
The question I am asking, was ¿why? If FROST & SULLIVAN said that Xenemetrix was/is the best one? It makes no sense to me. If Iphone 7 is the best mobile, revenues will grow up. That is how it works.
I also want to applaud to Bruce, how he sold GFI to Sicpa.
Before selling GFI, EUO had a market cap below 5MM, and revenues were 10% of market cao.
Now we have revenues around $1,2MM the same percentage of its market cap.
EUO has now a strong financial, with a lot of cash.
But the most important is how revenues are going to grow.
best regards