Hi MM,
Companies who fail to meet earnings expectations almost always suffer drastically from a falling stock price. This happens all over the world for small caps, mid caps, and blue chips. This is particularly clearly evident during "earnings season" (when quarterly earnings reports are released).
EDE made a classic mistake of underestimating the commercial roll-out time frame and this being extremely overly optimistic with the sales and earning forecasts (see numerous Investor Presentations). Even now, they still have massively under delivered on the sales front (which also caught me on the wrong foot). This cold hard reality continues to depress the SP, which has taken a huge beating due to the massive difference between expected and actual earnings.
Having said all this, there has been significant progress on numerous other fronts over the last 3+ years:
1. The development of EdenCrete HC. Here a tweak of the original EdenCrete recipe means that the amount of EdenCrete additive required is now 50% less, which will mean a substantial saving on transport costs within the US, but moreso to Australia and Korea, and eventually Europe. This was the primary reason why EdenCrete HC was developed in the first place.
2. EdenCrete PZ. This should be the answer (perhaps also combined with EdenCrete HC) in areas and countries where the quality of the sand used in concrete is poor, which is very much the case in South Korea. In fact I believe that without the advent of EdenCrete PZ the tests in South Korea at the Hanyang University would have been a total failure (the test results announced on February 12 this year already clearly indicate that the sand in Korea has caused considerable problems and thus led to reduced performance in the test results using EdenCrete). Imagine if through the addition of EdenCrete PZ desert sand could suddenly be used in concrete (desert sand is currently unsuitable for use in concrete). This would be the answer to the global sand shortage facing the concrete industry. A tantalising prospect!
3. Twiggs County. There is no better way to better demonstrate how effective EdenCrete is than on an ca.US$600,000 interstate highway. This is the proverbial proof of the pudding. It shows that EdenCrete is the answer on a "perfomance" as well as an "up-front" and also "life-cycle" cost basis.
4. MARTA Whitepaper. Enough said.
5. PARCHEM/FOSROC (belong to Dulux Group). No major company like Dulux would take on EdenCrete if they were not entirely satisfied about the ownership and stability of EDE and TAS, as well the perfomance of EdenCrete. Here again, the advantages of using EdenCrete are considerable, on both an "up-front" and also "life-cycle" cost basis. PARCHEM/FOSROC obviously believe these are winning arguments, which will convince their existing customers to choose EdenCrete for their construction and infrastructure projects. In addition, by taking on the exclusive distribution rights for EdenCrete, PARCHEM/FOSROC are quite likely to win a large number of new customers.
6. Shotcrete: EdenCrete's is absolutely perfect for this application. Apart from its brilliant bonding capability (it sticks like s!!t to a blanket) it obviously lends itself perfectly for a number of other very important reasons. Here again it shows that EdenCrete is the answer not only on a "perfomance" basis but also on "up-front" and also "life-cycle" cost basis as well. It may actually save contractors money on reduced maintenance for their machines, as well as saving fuel costs.
7. EdenCrete trials/tests in general. There are a vast number of trials and test all going on with various US DOT's etc, not to mention the hugely important and upcoming NTPEP and Class A approvals.
8. EdenPlast. Potentially also a game changer, that should be far easier and much faster to roll-out than EdenCrete.
9. Rubber. Graphene is already being successfully used as an additive in rubber. Therefore it will be very easy for EDE to enter this market, and quite possibly be vastly more successful for a number of economic and performance reasons.
10. Lithium-ion batteries. R&D is currently being undertaken to greatly increase the performance of cathodes in lithium-ion batteries using CNT's instead of graphite. This has already been successful under laboratory conditions. Here again this is game changer. Imagine up to ten times the performance in mobile phones, or electric vehicles that can drive for well over a thousand kilometers without having to be recharged.
Summing up, EDE and thus the EDE SP (and accordingly TAS) have taken a beating for not delivering on EdenCrete sales for over the last 2 years. The question is, at what time do investors see the current SP's of both EDE & TAS as a golden buying opportunity – especially given the current fundamental situation regarding EdenCrete, as well as EDE's other highly promising future "CNT" prospects (partly highlighted above).
Best regards,
Mark
Please note: This post, and indeed all my posts, are always my personal opinion. They do not provide tax, investment, or financial services advice. The information herein is presented without consideration of the investment objectives, risk tolerance or financial circumstances of each specific investor. Investing involves risk, including the possible loss of principal.
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