Small Cap Updates & New Recommendations – April 5, 2014

Small Cap Updates & New Recommendations – April 5, 2014 post image

This week we have updates on Enterprise Group (E), Global Minerals (CTG) and IsoRay (ISR).

Enterprise Group (E – $1.02), a consolidator of construction services companies operating in the energy, utility and transportation infrastructure industries, announced strong financial results for its fiscal year 2013.

Revenues for 2013 reached $34.8 million, an increase of $16.3 million or 88%, compared with fiscal year 2012. This increase can mainly be attributed to the acquisition Calgary Tunnelling & Horizontal Augering Ltd. (“CTHA”) in June 2013, as well as expansion of Enterprise’s service equipment fleet, which has allowed the Company to both increase its capacity and attract projects from major customers.

Thanks to the significant increase in revenues, EBITDAS increased from $4.4 million in 2012 to $10.0 million in 2013. Earnings per share were $0.08 for 2013, an increase of $0.04 when compared to the prior year.

Looking ahead, Enterprise expects that the performance of its Utilities/Infrastructure Division will continue to improve. During 2013, this Division renewed a three year, multi-million dollar service contract with one of Canada’s premier power suppliers and, due to the high level of service and quality of work, was also awarded a second contract from the same customer that is similar in size and scope.

Enterprise also expects significant growth from T.C. Backhoe and Directional Drilling (“TC”). In January 2014, TC entered into a Master Service Agreement to provide hydro-vac services for a joint venture project between a major oil company and one of North America’s largest energy companies. TC also increased the scope of its Master Service Agreement with one of North America’s largest pipeline and natural gas companies, which was previously announced on October 25, 2013. In total, these agreements are expected to generate $5.5 million in revenue over the next 24 months.

These contracts are evidence of the growing demand for quality work within Enterprise’s markets, and the backlog of projects that has developed as a result. In order to satisfy this demand, Enterprise intends to significantly expand its service and rental fleet over the course of 2014.

“Enterprise’s impressive year end results clearly illustrate the benefit of our selective acquisition strategy,” stated Leonard Jaroszuk, the Company’s Chief Executive Officer. “CTHA continued to play a major role in improving our revenues, and its contributions are testament to both the quality of its service offerings and the effective manner in which it has been integrated into our overall business. Integration has emerged as a core competency for Enterprise, and we have already begun to apply ourselves to the inclusion of Hart Oilfield Services, which was acquired in January of 2014. We expect that this acquisition will be immediately accretive, expose Enterprise to new strategic markets, and create the opportunity for efficiencies within our existing businesses.”

“We fully expect that Enterprise will continue its trend of improvement during 2014. Our markets continue to display economic growth, and we are eager to increase our capacity in order to satisfy the growing demand for our high-quality services,” concluded Mr. Jaroszuk.

Enterprise Group was first featured on our website at $0.175. Since then the stock price increased by almost 500%. Although that’s a substantial profit, we advise you to hold on to your shares as the company has good prospects and the stock still only trades at a P/E of 13. Profile Page

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Global Minerals (CTG – $0.22) is over half way through with tunneling towards the Silver/Copper/Antimony vein at its Strieborná project in eastern Slovakia.

The Company needs a sample from the vein to conduct final metallurgical tests. In order to reach the vein, miners have to make a 100 meters long tunnel, starting from the existing underground tunnel at level 6, located approximately 180 meters below surface. They commenced work early March and have now blasted and drilled about 50 meters. If the workers keep up this pace, the vein should be reached by late April.

Global Minerals already conducted a whole series of metallurgical tests to assess the most commercially beneficial method to produce silver/copper concentrates for sale to custom smelters. Those results will be included in an upcoming Preliminary Economic Assessment (PEA).

Current metallurgical and engineering studies focus on the downstream processing and recovery of antimony and mercury which are found in the concentrate. This is necessary because the level of the two products in the concentrates is too high for smelters to accept the concentrate as is.

Global is currently evaluating recovery of antimony as a byproduct by hydrometallurgical leaching of the concentrate. Producing antimony as a by-product can have a significant economic benefit although the hydro-met process will add capital and operating costs as well.

The results of the ongoing, and upcoming, test work to separate the mercury will define the best process flow sheet and design parameters for the PEA. The extracted mercury will be disposed of in accordance with EU regulations.

Global continues to execute as planned. Hold on to your shares. Profile Page

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IsoRay (ISR – $3.03), a medical technology company and innovator in seed brachytherapy and medical radioisotope applications, hosted a booth this week at the annual Meeting of the American Brachytherapy Society (ABS).

During the convention, five papers were presented by distinguished doctors and thought leaders in which they documented their experiences and successes in using IsoRay’s products. The studies described showed exceptional results realized in areas of the body where Cesium-131, or the physics associated with Cesium-131, was used.

IsoRay’s various products, including Cesium-131 seeds, sutured seeds, stranded mesh and the GliaSite® radiation therapy system, give physicians the ability to directly place a specified dosage of radiation in areas where cancer is most likely to remain after completion of a tumor removal or by placing seeds within the prostate. The ability to precisely place a specified dose of radiation means there is less likelihood for damage to occur to healthy surrounding tissue compared to other alternative treatments. IsoRay’s cancer fighting products diminish the ability of the tumor to recur, resulting in important benefits for patients in longevity as well as quality of life.

IsoRay is the exclusive manufacturer of Cesium-131. The pioneering brachytherapy therapy is one of the most significant advances in internal radiation therapy in 20 years. Cesium-131 allows for the precise treatment of many different cancers because of its unrivaled blend of high energy and its 9.7 day half-life (its unequaled speed in giving off therapeutic radiation).

With the ongoing publication of positive study results like these, the medical and financial community is becoming increasingly aware of the innovative alternative our Cesium-131 products offer to cancer patients.

We first featured IsoRay on Smallcaps Investment Research on January 25, 2014 at $0.75. Shares have quadrupled since, and we believe that the Company, with FDA and EU cleared products for sale, still has significant potential. Although it never hurts to lock in some of your profits when a stock increases this much in such a short period of time.

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