EnWave Corporation On the Brink of Becoming Cash Flow Positive
EnWave Corporation (TSXV:ENW – $1.09 CAD & OTC:NWVCF – $0.86 USD) offers industrial-scale dehydration technology for commercial applications in the food and pharmaceutical spaces. The Company’s Radiant Energy Vacuum (“REV”) platforms are becoming the new global dehydration standard: faster and cheaper than freeze drying, and with better end product quality than air drying or spray drying.
Judging from the large and well-known companies with which EnWave has signed commercial licenses or research collaborations, it’s clear that its REV technology is a game changer. Moreover, EnWave hardly has any competition and its technology is fully patented, which enhances the Company’s valuation.
Sales for the first quarter of fiscal year 2015, ended December 31, 2014, reached $2.51 million, an increase of $1.94 million, or 343%, compared with the same quarter last year. The strong increase was mostly driven by EnWave’s German subsidiary’s success in securing machine-building contracts and by its 51% owned subsidiary NutraDried, which generated more sales during the first quarter of fiscal year 2015 (approximately USD$450,000), than it produced for the FULL fiscal year 2014 (USD$220,000).
Its German subsidiary Binder continues to perform well as it secured an additional C$4.38 million in orders over the past few months. And NutraDried’s cheese snacks will soon be sold at 3,500 locations of a large international coffee chain as part of 16 week trial. Depending on the outcome of the trial, distribution could be expanded. Moon Cheese is already available in approximately 1,700 locations across the United States and Canada.
As a result of all these positive developments, EnWave is well on its way to reach its goal of becoming cash flow positive in 2015.
Based on our estimate of 92 million shares outstanding, the intrinsic value of EnWave’s shares derived from our model is $2.79, which suggests significant upside potential over the medium-term for the Company’s shares from the current level.
After we recommended EnWave in January 2015, its shares rose to $1.34, but have since pulled back, offering another excellent opportunity for investors. If you don’t have shares of the Company yet, we advise you to buy an initial position. For those who already own shares, we advise to carefully watch the news and add to your position as more contracts are announced.
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