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Energy Recovery, Inc. Message Board

  • wayne_lamontagne wayne_lamontagne May 13, 2014 12:28 PM Flag

    New Entry Points

    The business prospects for ERII will improve in the years ahead. Unfortunately, like many other emerging companies, it has to spend a lot of cash in the beginning in order to gain market share and create positive traction. Investors can expect the company to report low or negative EPS for many more quarters prior to becoming an economically viable company. At present, the stock price represents more expectation than reality. However, investors should keep a close watch on the stock for good entry points below the current stock level.

    Sentiment: Hold

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    • I finally jumped in for about 1/2 of what I'd like to have after the earnings. The reason I don't have the other half is exactly what you're mentioning. The call sounded outstanding, but none of it is hitting the bottom line any time soon. The way I see it, it's going to come down to a race between bad earnings and good PRs. They have the cash and no debt to weather it as a company, but what worries me is that it sounds like they sign a ton of non disclosures so the contract announcements might be few and far between. I feel like I could easily be averaging down close to three. However, if they do get a big contract that they can announce it might leave the 4-6 orbit and never come back.

    • I sold out. I had not done much due diligence before getting in, but liked the technology and IP assets. But commercialization (O&G) is some time - years I believe - off. And, in the meanwhile, $250 million market cap (10 times sales?) seems way overpriced. I am wrong often, and I do think ERII could be a take-out candidate, but I also now see more competitors than when I got in. Good luck, hope this takes off - or gets bought out. Also, a few Ole Lorentzon's could move this fast with this volume...

10.60+0.21(+2.02%)May 27 4:00 PMEDT