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Equitech Int'l Corp  (EQTL) - A dark pink-sheet Nano-cap with emerging potential

6/29/2019

11 Comments

 
Picture

Equitech Int'l Corp (EQTL) interests me for two reasons;

1.  I like the look of the long range chart.

2. Change is afoot.

This stock is a little different to some of the others I own in that the share count is higher than I normally look for and there is limited financial data available to determine whether the firm is selling at a discount to it's tangible assets.

The company has been in operation for around 20 years and is engaged in the production of spectrometers and probes for manufacturing firms in the plastics, chemical, food, ink and paint industries.

Here's what I know;

Market Cap = $1,840,000
Share price = $0.016
Common = 115,000,000
​Float = 12,000,000


I have no idea what the current book value of the company is, nor do I know what it's debt and liquidity position is. What do I know?

First to the charts;

Picture
10 yr EQTL chart
Picture
Long-range EQTL chart

The 10 year chart shows that this stock has the potential to frequently move up several hundred percent and the long-range chart shows that it has been several thousand percent higher in the past but has been trapped in a narrow range for the past decade.

Now to the change I mentioned about.

The company has begun to emerge out of the darkness and there is potential for positive movement with the stock.

After years of mismanagement and a poorly executed strategy to capitalize on the fibre-optic sensor technology the firm invented they appear to have seen the error of their ways. A licensing agreement with ColVisTech, a German startup company, which was putting EQTL at a cost disadvantage has been cancelled after sales dropped through the floor and customers deserted the firm.

A new CEO has now been installed, a new website has been launched, limited financials have been provided, a new more competitive pricing structure has been unveiled, manufature of the company's products have been relocated back to the USA and the company has moved it's HQ from Florida to New Jersey.

EQTL has also returned to profitability in Q1 of 2019 after making a loss of $82,780 in 2018.
If the company can begin to get revenue back to 2016 levels and post a full year profit the stock price could move up significantly.


Picture
Source: EQTL Q1 2019 Report
Picture
Source: EQTL 2018 Annual Report

There is obviously some risks here, once more comprehensive financials are released it could emerge that book value is actually negative and liquidity is poor with negative working capital. The firm could have to issue equity or debt for financing and the turnaround plan could fail.

Worst case scenario is I lose my principal, if things go well this could be a multi-bagger. I'm in at an average cost price of $0.01.

Thanks for reading,

David

Long EQTL



11 Comments
Dan schum link
7/1/2019 08:31:03 pm

This sounds real interesting. Partial gamble. Is there any preferred or warrants?

Reply
David
7/1/2019 09:41:26 pm

Hi Dan,

The only info I've got is the market cap, share price and common from the OTC markets quote page and the financials I posted above.

This is not my usual type of investment and is certainly a partial gamble but I like the look of the chart and the changes which have occured thus far.

We'll see what happens :)

Reply
David
7/1/2019 09:52:04 pm

I'll also just add that EQTL's website says Q2 '19 results will be available on 20th July.

Reply
mike
8/4/2019 04:01:14 pm

Price / Sale is around 18. I think other fundaments are not meaninful. So this is rather an expensive stock. That's keeping me from buying this stock.

Reply
David
8/4/2019 04:45:04 pm

Hi Mike,

For sure, this is not cheap based upon the current numbers.

Even assuming the potential sales pipeline of $300K that the company expects in Q3 and Q4 materializes we're still looking at a P/S of 5.

This investment is based upon my observations of the long range chart and the fact the the firm is emerging from the darkness. It's really about the future potential of the company.

This is certainly not what one would describe as a value investment and is more in the mould of Ted Warren.

Until we see some complete financials it's impossible to know if the firm is selling at a discount to its tangible assets.

I should mention that the firm revealed in one of their reports that they own an equity stake in the German company they had the licensing ageement with though they have not disclosed the value or proportion of said holding.

I understand that many investors will not find this stock palatable at the current price, this is speculative.

Thanks for taking the time to read my blog.

Regards,

David

Reply
Mike
8/25/2019 11:08:17 am

The old financials of 2008 can be found here: https://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00014940

It does not seem that they have a lot of net-assets. Interesting is that this company is still alive and that it traded for a much higher price 10 years ago (although they were probably in the same situation as today).

Reply
Mike
8/25/2019 11:17:57 am

Sorry, I think this is another company.

Reply
David
8/25/2019 11:37:55 am

No worries Mike,


On a related note,

The turnaround appears to be going well with EQTL.

The CEO told me he wants the company to become fully compliant and reporting with the OTC markets and he is busy making positive changes.

The firm has adopted an insider trading policy and is moving toward becoming ISO accredited.

They've added another 10 sales reps in the last 2 months and noted that their sales pipeline is growing.

See here for the relevant press release;


https://img1.wsimg.com/blobby/go/5663e94b-9edd-4373-a53e-9f05973e1f6f/downloads/PR%20Insider%20Trading.pdf?ver=1566568496301

Regards,

David

Rahul nath
7/17/2021 04:29:44 pm

Hi , David since i was wanted to know your style more , i hope u hold EQTL ? Its a just awesome return

Reply
David
7/17/2021 04:34:33 pm

Hi Rahul,

Yes, I continue to hold EQTL, the company is in the process of becoming compliant with SEC reporting standards and we should have fully audited financials soon.

Reply
Chris
1/15/2022 07:10:51 pm

It looks like the company has been making a lot of progress. They have detached themselves from the German licensing agreement, merged with two other profitable business which allow them to be more vertically integrated, brought in a new investment, and now have international sales reps. Price had a bump last year but has settled back down. Thoughts?

Reply



Leave a Reply.

    David J. Flood

    UK based Investor. I focus
    ​on Net-nets, Pico/Nano caps, AIM/OTC/Dark stocks & Special Situations. Balance sheets & Long-range price charts are my guide. Looking for inflection points. Do not construe my blog as investment advice, always conduct your own due diligence.  Caveat Emptor!


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