Is transport technology the solution to COVID-19 breaches?

Is transport technology the solution to COVID-19 breaches?

Date of Report 31/08/2021
ASX: ERD

Price A$6.050

52 Week Range: A$3.540 - 6.510

Market Cap: A$586.98m

Sector: Technology Hardware & Equipment

Every second week we invite a leading fund manager to present at The Insider: Meet the Fund Manager. Joel Fleming from Yarra Capital Management selected Eroad Limited (ASX: ERD) as one of his 3 favourite stocks, which grew 8% across all regions in FY20 despite disruptions caused by COVID-19.

January 29th, 2021

June 23rd, 2021

The Insider: Meet the Fund Manager sessions are a great way to hear directly from leading funds managers. They share their approach to investing, favourite companies and their market view for the year ahead.

The Insider: Meet the CEO sessions feature a selection of company leaders who provide a succinct overview of big things their companies are doing. 

The near constant newsflow of truck drivers bringing COVID-19 across state borders points to how important it is for road fleets to be at the top of their game when it comes to safety and compliance.

The increased focus on health and safety in the transportation sector has made Eroad (ASX: ERD) more relevant than ever. Eroad is a technology company that helps road fleets operate safely, within budget, and in accordance with increasingly complex regulations.

Despite COVID-19 causing chaos for most players in the global supply chain, Eroad managed to grow 8% across all regions in FY20. 

This is in line with the global telematics sector which is poised to grow by US$750 billion by 2030.

The demand is led by the digitisation of the transportation industry, as well as increased government mandates surrounding health and safety, especially in relation to minimising the spread of COVID-19.

“We got very focused on looking at what would add more value to existing customers and increasing our competitiveness,” said CEO and Executive Director, Steven Newman.

Mr Newman cited the rollout of dash cams, new workflow and maintenance applications, and a digitised logbook as some of the innovations that have attracted growth to the business

Eroad currently has 126 203 contracted units with 94.9% retention rate across the USA, Australia, and New Zealand.

According to Mr Newman, the high retention rate “really goes to show how critical we are to our customers’ operations.”

With a market capitalisation of $586.98 million as at 31st August 2021, Eroad is a microcap which Yarra Capital Management’s Joel Fleming has described as part of a “nursery of future winners.” 

Although microcaps can often go under the radar, Mr Fleming selected Eroad as one of his three favourite microcaps. Microcaps have “really compelling” potential for long term capital growth, according to Mr Fleming.

“This is about companies that are growing because they have a better product, a better solution, customers are flocking to them and their business model is differentiated,” said Mr Fleming.

Mr Fleming said microcap businesses like Eroad tend to bring more unique and innovative offerings to spaces with little, or any, direct competition.

Click here to view more videos from Joel Fleming’s ‘Meet the Fund Manager’ session, or click here to view the full ‘ The Insider: Meet the CEOs’.

 

The CEOs of all the companies chosen as Fund Manager favourite stocks are invited to present at our Meet the CEO series. Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position.

Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.

The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.

Next Fund Manager

Luke Winchester – Founder and Portfolio Manager - Merewether Capital

Merewether Capital is the first venture coming out of ARC, the new fund incubator platform backed by Harley Grosser’s Capital H Management. Merewether is about to launch its inception fund featuring a concentrated portfolio of high conviction microcap equities. Luke Winchester, Founder and Portfolio Manager at Merewether Capital, started the company with the intention of applying his vast microcap investment knowledge to a new top-performing fund. Luke has over 10 years’ experience in microcap investing, most recently serving as Emerging Companies Portfolio Manager at Oracle Investment Management.

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The CEOs of all the companies chosen as Fund Manager favourite stocks are invited to present at our Meet the CEO series. Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position.
Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.