Eaco Corp (QB) (EACO)

[SSKILLZ1]

EACO

I’ve been buying a tiny position in EACO over the last month a few shares here and a few share their. Here is what I like.

1) EACO has been growing for years, as revenue has grown from FY 2010 of 91.5 million to 134.7 million in FY 2014. And they have grown revenues every year, and so far 2015 looks more of the same as they continue to grow revenues.

2) EACO earned .23 in q2, which means if you annualized that it would be cheap, but EACO is seasonal and their best quarters are q3 and q4 are yet to come. So I expect really good numbers of say .35-.45 the next two quarters, hence I feel the stock is very cheap at current prices in my opinion.

3) EACO has a healthy balance sheet with a $1.33 in cash.

Conclusion: I like EACO and think it has a chance to post some really great results. The downside is the CEO owns a lot of shares and occasionally sells some shares, so I always think EACO will receive a lower PE because of it. But still a PE of 8-10 gets us to about $9-$11 in my opinion. All is just my opinion, and I could always be wrong though.