Our large cap stock this week is EHL.

EHL sup­plies equip­ment rental solu­tions to the earth­mov­ing indus­try.

Some of the rea­sons it is our large cap stock of the week include:

• We’ve liked this com­pa­ny for a while. In fact, Tony pre­vi­ous­ly made it his stock of the week back in late August.
• How­ev­er the price dropped short­ly after their results came out and their net prof­it was down. 
• When Tony looked into it though, he realised Eme­co has been going through a bit of a restruc­ture over the last 12 to 18 months. They had a recap­i­tal­i­sa­tion, paid down debt, etc.
• Plus a lot of the equip­ment rental has been slowed down by COVID, par­tic­u­lar­ly in West­ern Aus­tralia, where it’s been dif­fi­cult get­ting fly in fly out work­ers to get in there, which lead to fleet util­i­sa­tion being down from 64% to about 59%.
• But we think their num­bers look quite good.
• The share price is $1.10, but our intrin­sic val­ue #2 is $2.38, more than twice the cur­rent price.
• The price is also low­er than Stock Doc­tor’s intrin­sic val­ue of $1.51.
• Equi­ty per share is $0.99, mean­ing the share price is near­ly one-for-one. There’s not much fat in the price. 
• It gets a score for hav­ing con­sis­tent­ly increas­ing equi­ty. 
• It also gets a score for hav­ing a low price-to-oper­at­ing cash­flow ratio of 2.74.
• It’s just bro­ken through the Napoleon line (mean­ing it has been a Josephine but has recov­ered).
• It has an aver­age dai­ly trans­ac­tion vol­ume of $1.69m, mak­ing it suit­able for investors with deep pock­ets. 
• QAV score of 0.23