With the overnight news that US inflation continues to trend lower, it is time to get more exposure to the market.
We have recently seen that some of the worst-performing companies of the past 12 to 18 months have bottomed and started to trend higher.
One company we have identified that is on the recovery is one we have previously had a position in this company: EML Payments (EML).
EML Payments is a financial services company, issuing mobile, virtual, and physical card solutions. The company manages over 1200 programs across 23 countries in North America, Europe, and Australia.
It offers its prepaid payment service in the four variants of payout cards, incentive and reward cards, gift cards, and supplier payment cards.
A look at the long-term chart shows the company’s share price peaked at around $5.00 before covid struck and then again in April 2022 at the peak of the recovery. Since the high, the company has encountered countless problems with regulators, especially in Ireland, where it operates its European Union business.
The problems in Ireland have centered around Ireland’s central bank identifying deficiencies in the company’s program for dealing with anti-money laundering risks.
The company has acknowledged its problems and has undertaken a major cleanout within the last 12 months, replaced both its chairman and CEO. When dealing with regulators, it is always good to show that the individuals who oversaw the problems are gone and that new management is serious about correcting the previous problems.
As well as new management EML has seen some activity on its share registry, with Alta Fox Capital becoming a significant shareholder with 8.14% of shares. Alta Fox targets underperforming companies, management teams, and boards. They are what can be called an activist investor. They turn up on the share register and agitate for change. Given the share price performance over the last 12 months change is well and truly needed.
We will start with a small position.
TRADE ACTION
Quantity: Buy 2,500 shares
Entry: Buy up to $0.85
Stop Loss: $0.60
Target Price: No target price
