ePlus Is Undervalued, But Price Resistance And Cash Levels Are Concerns
- EPlus is attractively priced, trading on FY16 P/E of 10.6x and P/S of 0.37x.
- Ranks among the cheapest 10% across the Russell 3,000 in terms of current Ev/Ebitda and P/S levels. Companies in these deciles have produced annual returns of 15.1% and 19.3% respectively.
- Ranks among the most efficient 10% as measured by Asset Turnover. Companies in this band have delivered annualised returns of 11.2% over the past 14 years.
- Share price is in an uptrend and momentum looks to be recovering. However, there is resistance at $60 that has proved to be stubborn.
- Divergence between positive earnings and negative cash a red flag that investors need to be comfortable with before investing.