The Environmental Group Limited (ASX: EGL) is an ASX listed company which is committed to protect the environment by improving water and air quality, reduction in carbon emissions, enhancing waste to energy production.
The company operates through four business units to achieve its objective:
- EGL Water – Focuses on reduction of water pollution, through low cost technology.
- Tomlinson Energy Service –Business unit working on company’s strategy to build a bio/waste to energy platform
- Baltec IES – Business unit that tackles air pollution by providing inlet and exhaust systems for gas turbines
- Total Air Pollution Control – Consists of a range of technologies focusing on solutions for dust, odour, harmful gasses etc.
On 28th May 2019, the company announced that it had got positive results from testing the pre-market phase of ELG Water patented technology.
This patented water treatment system, was developed by the company after going through extensive testing in partnership with Victoria University. The system is reportedly to be capable of very high destruction rates of PFAS using innovative technology, which could revolutionise the treatment of PFAS.
Apart from being highly effective, the water treatment system is also cost effective when treated for PFAS contamination, indicating a strong market potential for treatment of PFAS contaminated sites.
Furthermore, after analysing the related market implications, the company is confident of a successful launch in 2020 with commercial returns.
On 22nd May 2019, the company announced the appointment of a new managing director and provided an updated on the business.
Om 5th February 2019, the company released purchase details of RCR Energy Service assets.
Looking at the weekly chart, one could notice that the stock is quite volatile, which can be seen by erratic movements after every few weeks (marked by a white ellipse). In December 2017, the stock made its 7-year high of $0.095, which continues to be the highest price level registered in the past seven years, as on 29th May 2019.
After making the top, the stock started to fall, which is not surprising, given the volatile nature of the stock. Further, in the next couple of days, the stock witnessed more price correction and the stock settled at a level of A$0.036 in June 2018.
Weekly chart of EGL (Source: Thomson Reuters)
After one week of this low, the stock price recovered quite fast in the next week, providing a return of more than 45% from the previous week’s closing. This move increased the possibility of the bottom confirmation at A$0.036, however post couple of weeks, the stock gapped down to a new low of A$0.032 and again in a couple of weeks opened gap up and surpassed the previous 45% move quite comfortably. In Mach 2019, another erratic move was witnessed.
This kind of volatile nature makes the analysis more difficult as one big move on either of the direction can defy the existing technical outlook. However, considering the nearest support zone around A$0.036 – A$0.032, the stock may take support and continue to consolidate before commencing a new trend.
The company has a market capitalisation of A$10.66 million, and the stock had touched a 52-week high and low of A$0.08 and A$0.032 respectively. The stock has not been traded since 20th May 2019, and the last closing price is A$0.049. The last one-year return of the stock is 22.5%, and the YTD return stands at 40%.