Does Electric Optics Systems fall into the Blue Ocean Strategy?
If you're familiar with the phrase "Blue Ocean Strategy" you will appreciate that any company that can successfully execute it, puts itself in a very strong position.
Essentially the Blue Ocean Strategy by Kim and Mauborgne, is one of the best business strategy books I have read and it seems that Electro Optic Systems, which operates in Defence, Space and Communications technology, has read it as well.
Electro-Optic Systems Holdings Limited [ASX: EOS] describes its mission as:
......using advanced technology to create new markets, not to enter markets.
Of course, achieving this and having it as a goal are two very different things.
But Electro Optic Systems has some impressive elements to the business in both technologies, strategic position, intellectual clout and cash.
EOS has fallen from pre-COVID highs of around $10.5 to $5.75 at the time of writing.
A$134 million institutional placement of new fully paid ordinary shares (New Shares) at an offer price of A$4.75 to enhance liquidity and continue to fund ongoing growth initiatives and working capital requirements
But no investment is without risk.
To explore what the risks might be, I spoke with Henry Jennings of
Marcus Today, who wrote a bullish piece on EOS for LIveWire.
Jennings started in financial markets in London in the 80s as an options trader before coming to Sydney and spending 7 years at Macquarie Bank including a stint running equity derivatives and cash trading.
Start Basic overview.
2.26 EOS hasn't bounced back like many, why?
4.12 What are the downside risks to EOS?
5.14 Space exposure of EOS
EOS Defence Systems specialises in technology for weapon systems optimisation and integration, as well as ISR (Intelligence, Surveillance and Reconnaissance) for land warfare. turrets and remote weapon systems. Its key products are next-generation vehicle
EOS Space Systems specialises in applying EOS-developed optical sensors to detect, track, classify and characterise objects in space. This information has both military and commercial applications, including managing space assets to avoid collisions with space debris, missile defence and space control.
EOS Communication Systems specialises in innovative optical, microwave and on-the-move radio and satellite products that help to deliver high speed, resilient and assured telecommunications anywhere in the world. Morningstar rating sheet EOSPDF Morningstar Valuation Rating Undervalued Fair Value Estimate $6.918 Fair Value Percentage Diff 20.20% Liquidity: High EOS Quarterly report ending March 2020P
DISCLAIMER AND IMPORTANT INFORMATION I do own shares in this company at the time of writing this post but do not accept any payment from this or any other company I cover. Nor is my interview or blog in any way a recommendation and should not be seen as a form of financial advice. Disruptive technology stocks should be considered very speculative, high-risk, and extremely volatile. There are significant risks inherent in developing new technologies that are not discussed here. You should always seek professional advice before considering any share purchase or sale. Please read our full disclaimer.
