Good morning!

(at the time of writing, I hold a long position in ENTU)

For anyone who missed it, Entu (UK) (LON:ENTU) rushed out their interim results two days early, yesterday afternoon, presumably because the share price was in freefall. I interrupted my siesta to update to yesterday's report, reviewing the figures and outlook.

It's funny how different people see things differently. Reading the comments from other investors, some seemed reassured that the figures were not as dire as the plunging share price suggested. Others thought the fall in profits in H1 was terrible, and that the cashflow looked suspiciously weak.

My view is that the most important thing is the outlook statement. In this case the company confirmed that it's trading in line with full year expectations, and that they expected a soft H1 - if so, why didn't they previously communicate that to the market, I wonder? So it seems to me that the company has bungled its investor communications (which can perhaps be forgiven this once, since the company is still in its inaugural year as a listed company).

The share price has dropped from a peak of around 145p to 107p at the time of writing, yet none of the disaster scenarios that investors were fretting about has come to pass. In fact, the company says it's trading in line with full year expectations, which I think suggests about 13p EPS (so a PER of only about 8), and a dividend yield of just below 8% too. It's not often (any more) that you find companies where the PER and yield are the same number.

So taking things at face value, I think this is a good buying opportunity, so I've increased my position size about five fold at the recent lows, and just hope there's no more bad news to come out. Given that the company is nearly three quarters of the way through this financial year, they should have a good handle on how the results are likely to look, so confirming the full year forecasts at this stage should hopefully be relatively low risk.

Finally it has to be noted that, yet again, a UK stock which was about to report poor results was aggressively sold off by insider dealers (i.e. trading illegally, having been tipped off that the results were likely to disappoint) in the days preceding the results…

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