12th May 2025:

It looks to me like EGL have broken their downtrend, however...

1. They're a low liquidity microcap company - so today's +4% SP move was on less than $80K worth of shares (total traded all day was 313,500 EGL shares at a total value of $79,298.69);
2. There is a single buy order at 25 cps (in the green) which is skewing the numbers (in the orange) to suggest that there are more buyers than sellers when in reality if that one trade was cancelled or filled, that takes out more than half of the total volume on the "Buy" side; and
3. That one buy order looks huge compared to the other numbers there, however it's only worth $96.5 K ($96,485), so under $100K, not exactly a massive buy if it was to go through.

Still, on the plus side, if a microcap fundie was building a position or increasing an existing position, they'd probably choose to do it like that, in smallish buys (in $ terms) because of the low liquidity.

And we're now half way between their H1 report in February which disappointed the market and their next report in August which may yet prove that all is not lost and that there's still growth in this little company yet.

I had mixed feelings in Feb because the single project cost blowout (in Singapore) in their Baltec division was already disclosed to us before they reported, which is what ended their prior SP uptrend in mid November (EGL-Trading-Update-13-Nov-2024.PDF) however the actual H1 results in Feb suggested that there was perhaps a little more going on than just a single project having significant cost overuns due to a failed internal cost tracking procedure. I wondered if EGL's prior growth expectations (i.e. before November) may have been a tad overblown or exaggerated and I don't think I was Robinson Crusoe in that regard based on their continuing downtrend that only seems to have been broken in the past couple of days.

Still, I did load up on EGL in the past few months both here and in my larger real money portfolio outside of my super (due my SMSF being restricted to ASX300 companies - and EGL being way too small to be in that index), because while we clearly don't see the full picture from where we are, it seemed to me that my investment thesis was still intact. In short, balancing the risk vs the potential reward, I estimated that there was probably limited downside compared to the likely significant upside, so I'm still in.

But I am aware of the risks. If they release any further bad news, the SP will likely get smashed, and that SP fall will be turbocharged by the low liquidity where there will only be a few buyers for a lot of shares trying to be sold. I'm just betting that the news is more likely to be good than bad for the next little while, like 18 months or so.

Disclosure: EGL, as of today, is my largest position here (21.6% of my SM portfolio) and is one of the smaller-to-medium positions in my real life portfolio, which has much larger positions in LYL, GNG and WGB - WAM Global is almost up to their NTA/NAV now so they've staged a great comeback on the back of pre-announcing their next two dividends, one of them being a special dividend. I sold out of Southern Cross Electrical Engineering (SXE) last week to free up some cash (now that they're back up close to all-time highs). I still hold a medium-sized position in NRW (NWH) in that portfolio (as well as in my SMSF and here), plus I have three early stage gold companies (explorers / developers) in there, being Meeka (MEK), New Murchison Gold (NMG) and Medallion Metals (MM8) - MM8 being a new addition to that real money portfolio last week and a company I've probably never (or rarely) talked about here but one I reckon has probably got a rosy future based on the land / tenements they own, their drilling results so far, the location of their projects, the people running the company, and their substantial shareholders, plus a couple of resources funds that I respect that are also apparently (allegedly) shareholders of MM8. There are two more companies I'm also looking at with a view to putting some play money into them. EGL however, while still a bit of a punt (due to the risk), is more of an investment, and the EGL position in that portfolio is multiples larger than the much smaller positions I have in those speculative early-stage goldies.

Further Reading: https://environmental.com.au/