ELO (ASX) PYG vs ELMO

Originally posted by DairyDonkey: ↑

Buster,

Please state any affiliations or lack of before pushing into your analysis and comparisons. I appreciate you taking the time to put your case forward and likewise have taken a quick 20min review of PYG and now added it to the watch list (lets see how it progresses in the next twelve months).

My short appraisal, gives me the impression PYG is very much a copycat model to ELO, just less developed (it proclaims 27 modules to ELO's 15 but I would bet easy money these modules are less comprehensive/hold less value). PYG has only been listed for just over a year and yet have gone back to market twice for cap raises to fund acquisitions, they are <1/10th the revenue at <1/10 the market cap.

Their outsourcing service conceptually sounds alright, their outsourced back office support to asia just sounds scarey esp when we agree re complexity of HRM and it being such a critical relationship focused division.

Yes on first appearance PYG seems cheaper, but I would prefer the company spend more on R&D and growth to further accelerate market penetration than tighten up just to provide a barely positive EPS figure. I also feel you are better placed to stick with a proven operator, led by a founder with significant skin in the game and a longer track record.

I look forward to your further input on PYG vs ELO over the next few years.

DD

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Lets also remember that ELO is a tightly held stock (top 9 holders have >84% of the company) so free float/liquidity is poor. Any reasonable holder trying to exit or a few robin hood investors can easily move the share price. This is both a positive and negative, key thing to remember is that decent price swings like today are unlikely to be indicative of some forbearance of bad news but simply someone rotating out of tech and into the more immediate re-open trade/value plays.

Likewise six months from now with some positive momentum building off the back of the re-opening trade and ELO will easily be $8+ again.