Enterprise Group (E.TO): Leading Rebound In Western Canadian Energy Sector

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• published: 16 Jan 2014
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http://goldstocktrades.com/blog Enterprise Group (E.TO or ETOLF) has had a phenomenal year making two strategic acquisitions in the area of construction, infrastructure and energy. Enterprise bought a tunneling company which clears the way for pipes to run underground highways, trains or bodies of water. There are great margins in that business as there are very few competitors and increasing demand. Enterprise also bought Artic Therm which services pipelines through its patent protected flameless heat technology to assist operators working in cold weather conditions. In addition, the company owns TC Backhoe & Directional Drilling servicing utility providers and EOne Limited which rents heavy equipment to crews constructing pipelines and facilities. The company has over $30 million of equipment, trucks and specialized heating units. Enterprise's management team is looking for specialized, high margin businesses that generate large profits for shareholders. The company has attracted a blue chip stable of companies which include Apache, Suncor Energy, Encana, Shaw, Telus...etc. Enterprise has made a major run in 2013, but this may be just the beginning as some of the analysts that follow it says it is way undervalued and have targets of above $2. Enterprise just announced its 3rd quarter results which showed the reason why management acquired these strategic businesses. The company announced strong revenues, earnings per share and tens of millions of dollars worth of projects awarded with one of North America's largest pipeline company and one of Canada's largest railroad companies. Enterprise is getting known for the quality of their work. Calgary Tunnel has been awarded the 2012 Safety Award by the Alberta Builders Association in recognition of the largest employer to achieve zero lost time claims. Enterprise prides itself on it safety, customer service, and great performance in difficult working conditions. Enterprise Group (E.TO or ETOLF) just announced their intention to become a reporting issuer in the United States, which means that the company may be just beginning to attract a larger audience. When the company becomes registered with the SEC and reports through EDGAR more US analysts, brokers and financial institutions will become aware and have greater confidence in the company. Management and insiders have put their money where their mouth is and currently own around 30% of the shares outstanding. With a PE of under 9, impressive revenue growth and the companies ability to build a presence in an exciting growth industry in Western Canada, I believe the $2.05 target by M Partners is reasonable in 2014. This would be about a 166% potential return for current purchasers over the next year. The company and the business activity in the region is just beginning to get noticed by the investment community. Disclosure: Enterprise is a sponsor on my website.