Mister Z - I have invested in this company for a long time and in fact had I not been accumulating I would still be in profit at these levels. In reality I think you are expressing frustration at the wrong thing.
We invest in the market because we believe that the market has undervalued a stock - If it was fairly valued then we would look elsewhere for a cheaper stock - that valuation includes its potential - that is growth and is reflected in high PE's
When I fist invested it was just below its IPO level. I would move each day in a large range - any buying interest would push the price up and any selling would push the price down the gap between buyers and sellers was at times 15 cents.
I accumulated slowly - I have done that steadily and was really happy with share price performance - I even bought some at $2.50 it climbed higher then they did the $75 m raising that after a $60m mid last year. The company also has a DRP system which also mops up shareholder money. It only has a $440m market cap so raising with SPP and DRP over $150m in a year is over 30%. It was just too high and relates to needing the capital to secure a base load power station. To say I understand why is really a bit difficult - I understand it reduces your exposure to sharp price changes as you have power to supply your own customers. They trade in the market and buy and sell electricity - they have done well out of it so they are the experts.
I can understand your unhappiness if they issued a profit warning - They would never have been required to issue a profit forecast for 2014/2015 but for the fact they had bid on MaqGen. They have not issued one before that was for next year. They downgraded the growth and acquired a contract for 2015 onwards. In reality I can understand that. The gas business - well I am extremely glad they are focusing on the knitting right now - I want them to buy a power station but I want it totally in focus whilst they do it. I dont want supplying gas without the full understanding of it in place - so pilot it for a year and lets see.
How have they dissapointed you - they have not downgraded this year at all. They are growing very fast and are doing it on the back of large customers low margins. They are slowly moving into the more margin but higher customers numbers mid sector and they are still fully funded for now. The gap is that they needed a high share price to really be able to acquire MaQGen and thats not going to happen so many have bailed out of the share - they have noise around the chairman and I think that if there is smoke he will do the right thing. The founder has a huge stake and is more than just skin in the game.
So all we have is a mispriced share price because its in that phase where it needs to either be bigger or we need the capital being sucked out of shareholders to slow and catch up. Really no profit downgrades no bad news and yet it struggles to make headway.
Its just a function of time. Many will look elsewhere because other stocks are going up so this is not. Its the frustration of the instantly gratified brigade - the long investors have been in this for years. They are just quiet because they know the value but have no cash to put more in.
I have personal limits and this is on my limits - I get excited and try and cheat if it drops and buy a few more but in reality its not much. I will wait - I can see nothing wrong with the growth or the plan and they have been delivering on that plan. In essence the MaqGen disappointment the MEL and EGO are just sideshows - unfortunately they do reflect on the current share price.
We have to wait that all.
I have another share in exactly the same boat - much smaller but same principle a shareholder who took up a placement seems to want out and its created an overhang that cannot be eaten by the small players so the price is hugely depressed. They will have to wait until the results and then see what happens.
June is a terrible month and remember plenty of us have a lot of Capital gains so June wont be good for shares like EPW or my other problem. But once the results come out and those loss takers are gone it climbs slowly back.
EPW Price at posting:
$1.85 Sentiment: None Disclosure: Held
