Pull up a long-term chart of Enterprise Group (TSX: E) and compare it to the NYSE traded company Civeo (CVEO). There is a very close correlation between the two companies. E has always followed CVEO very closely!
Over the past month, CVEO has gained by 82.75%, which we believe will cause E to rise significantly higher throughout the rest of December and into early 2021! CVEO and E are considered to be "best of class" companies in their respective spaces! Anytime Canada has a large infrastructure project, CVEO is usually used to provide temporary hotel rooms for the workers while E often provides those same project sites with remote power generators, remote lighting systems, remote bathrooms w/sewage treatment, remote fuel storage, remote command centers, remote kitchens, flameless heat, etc.
E is a one-stop provider of on-site infrastructure equipment with many multibillion dollar publicly traded clients across a well-diversified group of industries including oil and gas E&P companies, infrastructure construction companies, agriculture companies, and gold mining companies. E custom designs and builds its own modular/combo equipment, which gives them a huge competitive advantage and makes it difficult for others to compete against E's three well-established subsidiaries: Hart, Westar, and Artic Therm. E owns a total of 3,200 pieces of mostly heavy equipment.
On March 20th, CVEO's price/book value ratio bottomed at a low of 0.157. At that time, E had a very similar price/book value ratio of 0.152.
Today, CVEO's price/book value ratio has returned to 0.769 but E's current price/book value ratio is only 0.281.
On June 30th, CVEO had a current ratio (current assets/current liabilities) of 1.185 vs. E's current ratio of 0.51. As of September 30th, CVEO has a current ratio of 1.147 vs. E's current ratio of 3.413. Now that E has a current ratio that is nearly triple the current ratio of CVEO, E at a very minimum should be trading with the same price/book value ratio as CVEO.
CVEO's current price/book value ratio of 0.769 would value E at $0.574 per share.
CVEO has $106.99 million in goodwill/intangible assets on its balance sheet, which is equal to 36.46% of its shareholder equity. E has almost no goodwill/intangible assets on its balance sheet.
CVEO's current price/tangible book value ratio of 1.211 would value E at $0.905 per share.
E has improved its gross profit margin on a trailing twelve month (TTM) basis to 29.23% for its highest gross margins in nearly six years. E's gross profit margin (TTM) has now surpassed CVEO for the first time in history!
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. This message is meant for informational and educational purposes only and does not provide investment advice.
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