EUO.v/EUCTF: The stock price indicates people are concerned with how the company will spend the $16 million cash, but I think the news of new investment thus far shows the CEO will be frugal in his shopping for new businesses.
The precision agriculture agreement with Netafim should be a relatively small investment to develop a handheld EDXRF analyzer to take in the field and the added database and reporting functionalities, but opens up a HUGE market of conventional agriculture that still uses less accurate composite sampling methods and slower laboratory analysis for soil characteristics. I went to the PSU School of Agriculture for my Environmental Resource Management degree and learned a bit about soil analysis for crop-specific fertilizer recommendations, the use of EDXRF could be a real breakthrough in increasing precision and turn around time for analytical results and fertilizer recommendations. Having a big established partner in that market should aid them in addressing the most important aspects of developing a easily adaptable solution.
I'm also very intrigued by the announcement yesterday about currency inks! Something tells me there's a lot more to this than meets the eye, Eurocontrol is already partners with the world leader in currency inks, SICPA, who just announced a 10% investment in EUO shares earlier this month. Did SICPA help evaluate this company's technology, or did EUO's CEO keenly zoom in on this before SICPA learned about it? DigiFlex has very interesting technology, but their website doesn't mention anything about authentication or security inks, so did Eurocontrol's CEO educate them about the potential of their technology in the currency ink market? It's very interesting and I can't wait to see how that develops.
Then the company has also budgeted to spend $2 million this year to further the development of their XwinSys semiconductor inspection system that they claim to be developing in cooperation with two of the three largest semiconductor companies in the world.
As for the fuel marking contracts, there are two polar opposite approaches a country/customer may want to take, they will either implement it covertly to catch their criminals smuggling fuel into their countries, or they will publicize the program to act as a deterent to the smugglers. Minimum royalties will be paid 10 days after the end of each semi-annual period and any surplus royalty will be paid 60 days after the end of the semi-annual period, so we should get a periodic indication on their progress, but I am not expecting any surplus royalties for their first six month period, that would be an exceptionally quick sales cycle for such a beurocratic sales target in global governments. Of course the European Union tender announcement should be coming sometime later this summer.....and that could be a true gravy train for EUO's 5% royalty stream!!!
While this stock has more shares than I typically like, I think the size of the opportunities ahead of it give it a proportionately large opportunities ahead of it.....and think it is capable of multi-bagger performance id due time.
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