Enero (EGG) is another one where I am very curious to know the end of the story. A bit like Paygroup, there are not many discussion about the stock, which is quite under-researched. For investors who have no updated view of the company, it is rather uninteresting as it is a collection of media agencies. So a business supposed to be quite volatile, which can explain the low valuation now.
However, there are 3 elements which are worth mentioning in this story : - several good stock pickers of small caps keep buying this share (in particular Wilson Asset Management, Perennial Value and Regal), - since the beginning of covid, the company has surprised the market by publishing strong results, both on top line and bottom line, without doing any major acquisition, - the main reason for their good results is their 51 % holding in OB Media which keeps publishing stunning results and seems to explain why the company mentioned an acceleration of their top line and bottom line during H2 22. Like a lot of small caps, Enero is cheap and has corrected recently.
According to my calculation, the stock is really cheap both on free cash flow yield and sum of the parts, while this valuation is supported by OB Media. I suspect that, at some stage, someone will be able to extract the value of this company either by doing a bid on the company or if the company is able to buy the remaining 49 % of OB Media at a cheap price.
An element which attracts my curiosity in this story : Enero remains very secretive about OB Media, while it is clearly their main asset. I contacted the company to get more details, but I got very little.
