Enterprise Group Inc T.E

Paying debt off

[jcw604]

Instead of financing, it is paying off its debt: Operating activities provided net cash of $1,389,470 compared to $646,229 in the prior period. Net cash provided by operating activities includes $234,896 of funds received/accrued from the CEWS and CERS government programs. Net cash used in financing activities reflects the regular debt reduction payments made during the period of $319,302, the share buyback program using $94,289 and a net increase of $261,164 to the bank loan facility. Net cash used in investing activities reflects $1,331,445 paid to purchase property, plant and equipment and $663,912 of cash received from the sale of equipment. The majority of equipment purchased during the period was to meet customer demands.

[Stuckinsand]

what was the loss on the disposition of those specialized assets. remember the ones that were to make E western canadas leading renter of assets.

[jcw604]

They are evergreening their assets. Those assets are investments of the company. Sometimes, investment pays off, but other times, market changed and it demanded something else.

[Stuckinsand]

no sure what evergreening assets means in this case. perhaps it is management's admission they didnt understand what that market needed and wanted and are selling off a big mistake. I wonder if they an get it right this time

[jcw604]

No asset retain their value forever, especially technology related asset, such as computers, more advanced equipments. You mark their value down every year and replace them every 5 years to stay competitive. This is why their cash flow is way higher than their reported profit. This is a prudent way of accounting your profit. I believe their true profit is some where in between their cash flow and

[Stuckinsand]

Ok my jcw, isn't accounting amortization and write downs reversed for taxable income determination and CCA then deducted based on rates established by CRA. My limited understanding believes this is one of the items that result in the calculation of deferred taxes. Also, you are correct assets do decline in value, the decline in value should have so resemblance to economic value. Companies that

[jcw604]

Check sedi. They have been buying their stock back.

[Stuckinsand]

E repurchasing shares has never been a question. However, when shares are repurchase shouldn't EPS increase and therefore the stock price follow? If this basic math is indeed true why hasn't E's price increased? I am sure all investors and those following the stock have their own opinions.

[jcw604]

The institution has not started their research and buying yet. I want to be ahead of them.

[Stuckinsand]

sometimes in life we only perceive that we are in first place, kind of like the slow kid in a race just before he gets lapped by the faster kids. since the fall of 2014 E has sold off more than 50% of their business, had no significant acquisitions, paid huge wages and bonuses to their senior management team, recognize huge losses on the sale of assets, are having renew their assets with ones they

[jcw604]

I know what you're talking about. The market had been chasing its SP from 40 cents to $3.6 from 2011 to 2014. It was perceived as a fast growing company in those days. The market was wrong. Now, it is wrong in another way. It should correct itself eventually.

[jcw604]

actually, only to $3.4. Still over 8 times.

[Stuckinsand]

I am not a sophisticated investor however I seldom use "should" and "eventually" to make investment decisions. I learned the opportunity costs are simply to hi, there are better opportunities elsewhere.

[jcw604]

What do you think about DM?

[Stuckinsand]

"Dead Money" describes E very well