Another day, another continent, 20 countries in LA with EXISTING ERB customers and distributors. 600M people...
This new announcement is far more than a acquisition or new business in Mexico. Read the report carefully. ERB chooses it's words very carefully. But you have to read it carefully. This is yet another example of how ERB is a global aggressively expanding company.
You must look at the reports and information on the websites to see the complete picture. Looking at the entire ERB portfolio you can see how they are global and large selling into something like 100 countries on every continent now. This South America announcement pretty much completes the global reach to cover the entire globe geographically. When you look at all the ERB companies in their entirety you can see how total revenues and earnings make the current stock price laughable. I am guessing ERB is trading at a post combination low single digit PE like 1 or 2. And at a fraction of sales rather than a multiple thereof. Why that is so is due to a complete disconnect between investors and the reality of what the company is doing.
One can argue ERB is worth $5 or $20. That is a debate. But not $1 or $2.
Let me help you with the example of the announcement today. If you read all the words you will learn. ERB opened the office in Mexico to service all of Latin America. 20 separate countries. Not just Mexico. That 600M people or twice the size as the US. $400M is the market in Mexico. That is just ONE of the twenty counties on LA. 19 more. And they say they ALREADY have both distributors and customers. Not in the future. Now. And that market. Just like all markets is growing. 15 percent. But even faster growth on other places like Russia, India... Where ERB is also.
So not only are ERBs markets growing rapidly. ERB itself is expanding organically and in organically through acquisitions and expansion.
Add it all up. Today. Not tomorrow. ERB already together is growing at 100 percent. And making money. And valued as if it was bankrupt or not real. Traders determine the valuation. But not for long.
Hmmm. growing at 100%, really? Look at the financials? Look at the business. Read. Does it make sense. Company did nothing but stock quadrupled? Trading at huge multiple. Think. What happened? What changed? Definately has momentum. The last promoter (fox) was right about small float. That is the story but now Company needs to catch up to the overvaluation.
The financials of ERB without the full 13 companies together is not that relevant. With all 13 together the SA report is showing a minimum off $600M in sales. That is approximately 30X more sales than last year or a 3000% increase. That is pretty impressive.
But even ignoring the full ERB group of companies working together ERB reported revenue growth of 83%. Also pretty impressive.
Before that ERB had many years of being a sleepy no growth money losing company. In the last year since Suresh took over everything has changed.
From money losing to profits
From zero growth to either 83% or 3,000% growth depending on how you choose to look at it.
From zero acquisitions to two acquisitions.
From operating in a couple of countries to over 100.
From shrinking operations to expanding...
The point is ERB did all those things and has given us guidance in their earnings announcements or more growth, more acquisitions, opportunities for the 13 cos working together, new markets and products...
That is what has changed. But the stock price is still lower than where it was a few years ago. Basically in spite of this recent movement from 1 - 4, ERB is still at the market cap reflecting the former no growth money losing company that it was before Suresh took over and put his capital and businesses into ERB.
It is disruptive I suppose to some to see ERB go up from where it was to a little higher. Now ERB is making efforts to get a little attention for all that has and is happening. And a few others might have noticed. There will certainly be skeptics. That is fine.
But looking at ERB today and forward it is not at all hard to justify a stock price based on the business, not on an old stock price, that IMO should be $10 - $20 now with much higher targets in the not too distant future.
Let me add to that. ERB put in the PR that Mexico is a $400m dollar market, ERB' market cap is just over $50m, so if we capture just 10% of the Mexico market that gives revs almost equal to our current market cap. Also, any good business man will tell you that you don't open up new branches when you aren't making money. Its only a short matter of time before positive earnings are released, last quarter was a break even, so expect increase in revs, and positive earnings this quarter minus 1 time costs for setting up the Mexico operation. Dr. Snow is right, $5 is a minimum value for this as it stands right now. 2 elements missing to get that are a positive quarter and an analyst coverage. ERB is under the radar, but well worth the wait
This reads like 2 very astute posters. Seriously, if u want reassurance re ERB, go back and read Dr. Snowmans post for the past several months, too bad for many that there was only a handful of people that drank the kool aid, course , that was ok, since we got to have larger portions..