DC Capital
Long/short equity, special situations, event-driven, arbitrage

ENGlobal: Margin Expansion, Low Financing Costs, Increasing FCF, Buy The Dips

Shares of ENGlobal (NASDAQ:ENG) have given shareholders' a nice run over the last twelve months. Since making my first argument in June 2013 for why ENGlobal was a high reward growth play, its shares increased as much as 355% to $4.22. After the slight pull back, you can see EnGlobal has still maintained a market valuation 1.5x higher than its share price one year ago.

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Despite ENGlobal's shares were trading at an extreme discount, management played a major role in turning its business around. Its margins have continuously experienced favorable growth QoQ, and although total revenues on a TTM basis are current slightly below expectation, cost cutting measures are just beginning to unlock EPS growth...

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