On Friday, September 18th at 3:24PMEDT, NIA announced Enterprise Group (TSX: E) at $0.16 per share as its #1 overall stock suggestion for between now and year-end 2020. E exploded in the following days to reach a new 52-week high on Tuesday, September 22nd of $0.34 per share for a gain of 112.5% from NIA's suggestion price.
Although E on Tuesday closed above its long-term key breakout point of $0.278 per share, because the stock gapped up on Tuesday morning from $0.23 per share up to $0.255 per share... this gap needed to be filled in before E could breakout higher!
On Wednesday, E made a healthy dip on lower volume to successfully fill in the gap! E is a steal here at $0.20. Now that the gap has been filled, it won't take much volume for E to bounce back to $0.30+ in the days ahead!
Sometime within the next week, look for E to announce a major new long-term loan agreement with PNC Bank Canada, which we predict will immediately reclassify all of E's current debt to long-term debt. If we are right it will be the biggest possible catalyst for E!
E at the end of 2Q 2020 had a current ratio of 0.51, which means that E's current liabilities are nearly 2x larger than E's current assets. E's current ratio of 0.51 is the primary reason for its low share price. If NIA's prediction comes true and E announces a new long-term loan agreement with PNC Bank Canada, it will reduce E's current liabilities by 87.8%!
In this scenario, we estimate that E's current ratio will immediately rise from 0.51 today up to an extremely strong level of 4.16! Instead of having current liabilities that are nearly 2x larger than current assets, E's current assets will become more than 4x larger than current liabilities!
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. This message is meant for informational and educational purposes only and does not provide investment advice.