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Veterans In Packaging Inc (OTCMKTS:EHOS) Is A Turnaround Play

Veterans In Packaging Inc (OTCMKTS:EHOS) Is A Turnaround Play
Written by
Jarrod Wesson
Published on
January 17, 2018
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We appreciate companies, in which the management is in the process of reorganizing the structure as well as looking for good ideas and growth opportunities. These companies many times make a turn around in the share price.

If you agree with this rationale, then you will appreciate Veterans In Packaging Inc. (OTCMKTS:EHOS). It is a holding company acquiring and joint venturing with fully operational marijuana businesses. Its share price declined a lot in the last five years, but it seems that it recently released several developments that interested the market and the trading volume spiked up.

Check out the following stock chart before we provide more details about this name:

EHOS Daily Chart

Brief History

EHouse Global Inc. was founded in 2013 and is currently headquartered in San Diego, California. The company is looking for opportunities in the marijuana industry; more precisely, it is looking for acquisitions in cultivation. Also, the EHOS also looks for other sectors that support the growing marijuana industry.

We need to note, since the company is from California, that from January 1, 2017, acquiring recreational marijuana in this state is legal, which seems to be creating a significant amount of demand for cannabis products. Many marijuana companies are telling that they don't expect to be able to cope with the growing demand. As a result, the market has reacted by pushing up every marijuana company headquartered in California.

We believe that the share price of EHOS has not spiked like that of other more significant competitors. It is good to keep this fact in mind.

Entering the horse racing business

Didn't we say that the company was looking for other sectors besides the marijuana business? On December 5, 2017, we could read that the company was seeking to enter the multi-billion dollar thoroughbred horse racing industry; the reason is the steady growth that this sector is experiencing. It was said that new audiences are moving away from sports shows like the NFL, and the sectors like the horse racing industry are benefiting.

There are also new tax regulations that make the industry attractive:

“Innovation within the sport and new tax regulations in favor of horseplayers are just some of the key drivers of that growth. We are looking forward to a successful launch in 2018 and following the lead of other industry innovators such as the Stronach Group, West Point Thoroughbreds, Team Valor International and Sagamore Farm.” said President & CEO Michael Bagley.

We believe that the fact that the company is trying to diversify its activities is very positive. The market should appreciate it. Additionally, if there is a way to increase EHOS's brand awareness thanks to the horseracing industry, it will be also positive for the company as a whole.

New CEO, the founder of Greenlink Financial, LLC.

Things seem to be moving quite a bit inside EHOS, which the market should be appreciating. First of all, a new President and CEO was elected. On January 10, 2018, it was released that Jonathan Smith had commenced to hold this post. He brings expertise in providing compliant financial and security solutions for high-risk businesses. We celebrated the appointment and will be waiting for his new plans, which, in our opinion, could move the share price when announced.

That's not all. He is also the founder of Greenlink Financial, LLC, which provides financial solutions for highly regulated industries like the medical and recreational cannabis sector. We believe that if both companies and the CEO work together, EHOS should grow. The fact that recreational marijuana is now legal in California and the support from Greenlink Financial places EHOS in an excellent position to benefit from the growing cannabis industry. That's our opinion.

What are the products that the companies will provide?

It was said that under-banked businesses, Financial Crimes Enforcement Network, registered banking solutions, asset-based lending, debt financing and credit cards services are among the products to be offered. In our opinion, there will be a need for such type of products if the marijuana industry flourishes in California. Let's be alert on the next quarterly earnings report. It may surprise the market and move the stock price.

Short Interest

There is another interesting fact to be pointed out on this name. The amount of shorts has been decreasing in 2017. On August 31, 2016, the short interest was equal to 1,656,786, while this figure had declined to 60,000 on November 30, 2017.

Short Interest - Veterans In Packaging Inc OTCMKTS:EHOS

We believe that these unethical individuals commenced closing their positions when they figured out last year that California would approve the sale of marijuana.

Shorts need to acquire shares to close their position, which will increase the demand for the stock. Thus, it may be good for the long side.

Conclusion

Currently trading with a market cap of $0.2 million, EHOS is an exciting story among small caps. Regarding the financials, we will be expecting a plan from the new CEO to recapitalize the balance sheet. In our opinion, it is one of the most critical points to address once new opportunities have been identified. It should also help retain the attention of many players in the market.

Finally, the company also needs to update its most recent financial statements, so that the market can assess the current economic shape of EHOS.

To sum up, follow this name since things are changing inside the company.

We will be updating our subscribers as soon as we know more. For the latest updates on EHOS, sign up below!

Disclosure: We have no position in EHOS and have not been compensated for this article.Image courtesy of Martin via Flickr

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