Frank,
Thought I'd respond to your (the company's) question about why the stock price is stagnant.
1. It is an Israeli based company. It seems the Israeli companies normally trade at P/E ratios lower than US based companies. [I wouldn't have thought it would be this much lower!]. My broker even made that comment when I bought some Edusf.
2. It's just plain hard to get information on the company. It's based in Israel. No US news articles, infrequent press releases, nothing on the Edgar database.
3. As far as I can tell, the company doesn't follow U.S. reporting guidelines. [Is this true?]. I believe that's viewed as a negative. I believe companies following US reporting guidelines are viewed as less risky. Also, the info would then be available on Edgar (if filed electronically).
4. I recently read the 20F. Edusf appears significantly subsidized by US/Israeli development grants, Israeli tax benefits, Degem "subsidies". If the company were to operate as a sole entity in the U.S. I don't think their profit margins would be as high as they are. Also, the many nuances of development grants, tax benefits, Degem royalties, etc. are difficult to comprehend. It takes time to understand them all and I wonder if investors are just turned off by the amount of due diligence it would take to really comprehend all of this.
5. In the last few years Latin Amer has been a big revenue gainer for Edusf. Again, Degem is the "sales force" in that part of the world. Without Degem, my guess is most of those sales wouldn't happen.
6. The company previously mentioned that Degem wanted to sell all or part of its ownership. Due to the "subsidies" Edusf gets from Degem, I think parting the two business entities would result in lower revenues and income.
7. As the previous post says, Degem's desired sale of its ownership is up in the air. Edusf hasn't released anything about the issue for many months.
Those are my random thoughts for now. It's a good question and I'll think some more about it. I've highlight what I believe the negatives are. The better response will be to offer suggestions on how to increase awareness of the company's steady growth.
I also should state that I found the 20F extremely informative. The company seems sound and has shown nice growth. I own shares and will continue to own them because I believe the company is a good investment.
bobs. |
