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A 10 inch by 10 inches by 4-inch electronic module dubbed STARCHAIN is to GPS what a CGI movie is to tintype.
STARCHAIN (E: TSX) and falls squarely into the IoT service genre. While there are similar products in other sectors, STARCHAIN is the only product that will track, diagnose, and effect meaningful costs savings in the resource industry for Enterprise and its lease/rental customers. As well it will provide much useful data back to STARCHAIN allowing it the ability to scale up continuously.
Particularly for Enterprise, which rents or leases 100’s of pieces of expensive industrial equipment to far-flung areas and winters that are almost otherworldly, weatherproof the units. STARCHAIN modules replace simple GPS units in two ways: First, it negates the monthly cost of each GPS unit saving thousands of dollars. Second, data access, unlike a straight GPS unit, provides unlimited data critical to its R&D.
Eventually STARCHAIN will evolve into a neural network to impact the most cost-effective client equipment decisions.
“While some might be satisfied with STARCHAIN in its current form, we see it as a base platform for future development utilizing collected data,” stated Desmond O’Kell SVP of Enterprise. “If a piece of equipment fails or experiences a mechanical deficiency on a remote project site, STARCHAIN alerts Enterprise and the fleet manager immediately so that a repair can be effected, or a replacement can be deployed, which in turn raises revenues, efficiency and asset life.”
The weatherproof STARCHAIN ‘plug and play’ modules also include an accelerometer, which can measure equipment movement from the smallest vibration to a catastrophic failure.
Equipment is built with an obsolence factor. Therefore, when a company rents heavy equipment to a myriad of users and weather conditions, it is not just smart business but critical to ensuring the maximum asset life for revenue generation. Followed of course by the ultimate sale at a premium price.
Asset Control = More Revenue, Longer Life
Enterprise has more than 200 industrial light towers that it rents to customers. Currently, once it leaves the yard, the equipment is equipped with only a 3rd party GPS tracker.
The onus is on the client to report any issues. In the past maybe 1, 2 or 3 lights would fail before they would indicate. With STARCHAIN, Enterprise will know when the first bulb blows and can send a repair. It can also check the other bulbs and help ensure they aren’t at their lives long-term re-rentable condition. As well, the module can STARCHAIN schedule on/off times, brightness, number of bulbs on to ensure cost-effectiveness, and again, produce less stress on the asset.
Extrapolate that technology onto a large inventory of massive trucks, dozers, drilling equipment, housing and the financial benefits are many and profound; primarily asset life, increasing revenue and margin increases.
Putting a value on STARCHAIN is difficult. While it is included in Enterprise’s total asset value of just over $1.00 a share (shares trading at $0.57), it is a minor balance sheet contributor. STARCHAIN will likely be a growth entity on its own as it evolves giving Enterprise a continuous and humongous competitive advantage.
Enterprise’s technology development group is performing successful infield testing. Management expects to offer its customers specialized equipment capable of several remote controllable features in Q3-Q4 of 2018.
Oh yes, There’s Lots More.
From CNN:
The downward pressure on oil continued on Monday (May 28/18) as traders considered data showing a jump in the number of US oil rigs, indicating potential growth in US production. US crude production has increased by about 25% since mid-2016 as producers look to capitalize on rising prices. Oilfield services firm Baker Hughes (BHGE: NYSE) released data on Friday showing the rig count in North America hit its highest level of the year last week. The current global rig count now stands above the average set in 2017.
In 2014-15, the oil price collapsed, and Enterprise got nailed hard but pretty much as collateral damage. Through savvy and bold decision taking, the Company remained cashflow positive throughout the decline and returned to profitably last year.
While many companies were simply worried about survival following the downturn, Enterprise paid down $54 million of debt, streamlined operations and came out of the debacle stronger and debt-free.
Bottom Line
As oil climbs (and yes, it will remain volatile) investors can participate in a company that is so much more than when it traded at $3.50 pre-decline. The Enterprise share price has doubled YTD. With the STARCHAIN tech development Enterprise could well morph into the industrial and perhaps national industrial rental firm of choice. The proprietary technology is already moving toward becoming a leader in the fields of logistics, deployment efficiency and even AI in the resource and infrastructure realm.
Also, there are the further investor enticements such as no debt, a significant acquisition chest, lean corporate structure and aggressive and effective management.
Also, it is TSX listed.
So, you are waiting for for…?
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