Follow up with ETLT

I had some entirely unsuccessful and obfuscating conversations with Heron Public, Eternal Technology’s investor relations department. The failed to follow up on some simple questions (like “who are your major customers?”) and had trouble understanding what I was asking for others.

Language barriers are a problem, so I won’t fault the company for this (yet). I still think the opportunity, if nothing lurks beyond the surface, is interesting and enticing. I bought a small chunk of stock weeks ago and have seen a nice return following the 5% stock buyback announcement. I don’t think it’s all that great news, given that the company has been massively dilutive in its issuance of lots of shares, often at cheap prices (not a spectacular sign).

Yet the multiples are still dirt cheap (less than 65% of my estimated book value and at a PE multiple that will make you salivate) and I figure it’s worth the calculated risk given the small stake and possibly large upside. The verdict is still out on whether the business model is sustainable, but the downside risk exposure of massive failure in the operations of the business anytime soon is virtually nil.

Leave a Reply

Your email address will not be published. Required fields are marked *