Previously in March during the sell off of equities due to the Coronavirus, we found 3 very promising green technology stocks we felt investors should put on their radar, and today we will be doing an overview on both their developments and their performance since our article “3 Green Energy Companies To Track When Markets Rebound” was published.
Xebec Adsorption Inc.
One of the technology companies we put on the radar for investors is a company called Xebec Adsorption (TSX-V: XBC) (OTCQX: XEBEF) from Montreal, Quebec. During the March sell off, we put out our alert of XBC at $1.99 and since then the company has rebounded and has hit a high of $5.00, a 151% return on investment since our alert. Since then, XBC has announced several developments including the closing of a $28 Million bought deal financing on June 26th 2020. A month later, on July 27th 2020, XBC received a purchase order of $6.3M for hydrogen and helium PSA purification from customers in the United States, Canada, South Korea, Italy, Trinidad and Tobago, Poland and China. The Chief Operating Officer Dr. Prahbu Rao stated “Xebec is in a unique position with our PSA platform because it can be used in all hydrogen generation systems. Hydrogen comes out of a steam methane reformer or electrolyzer with impurities that need to be removed in order to achieve a desired quality. We’ve been developing our purification technology for decades and it is a tried and tested solution that can be applied to everything from helium, renewable natural gas, and hydrogen. It’s exciting to see our Cleantech systems order flow pick up as we continue to grapple with the need to decarbonize and fight climate change”.
On August 04th 2020, XBC announced that the company has entered into an agreement to purchase all the shares outstanding of Enerphase Industrial Solution, Inc. (doing business as Air Flow). Based in North Carolina, Air Flow is a leading distributor and service provider of compressed air equipment and has been operational since 1981. This acquisition by XBC is quite notable as the company AIR Flow has generated revenues of approximately $10.1M for the fiscal year end of December 31st 2019, and revenues are expected to grow to $11.5M in 2020. To further touch on growing revenues for XBC, the company also reported its second quarter financial results on August 11th, 2020 and XBC reported record revenues of $19.6 Million for Q2 of 2020, an increase of 53% when compared to the $12.8 million the company reported for the same period in 2019. For the six-month period ending June 30th 2020, XBC reported revenues of $31.8 million, an increase of 41% when compared to the same period last year with revenues totaling $22.5 million. As we can see, XBC is growing its revenues at a rapid rate and by its current metric, we estimate XBC is on track to bring in over $60 million in revenue by Q4. XBC also has an impressive $60 Million of cash on hand.
More recently, on September 1st 2020, XBC has embarked on another acquisition as the company announced that it has entered into an agreement to acquire all the shares outstanding of Applied Compression Systems Ltd., based in British Colombia. According to Xebec Adsorption, the company Applied Compression Systems has recorded over $8 Million in annual revenues for 2019 with EBITDA margin of 12%. Chief Operating Officer, Dr. Prabhu Rao stated “ACS is both a customer and supplier and has unique capabilities to design and build compressed air & gas systems. This acquisition will strengthen our Industrial product portfolio as a compressor integrator while simultaneously increasing our service presence in Western Canada”. With its organic and growth by acquisition model, XBC is significantly growing its revenues and certainly one we will continue to track.
Kontrol Energy Corp.
Another one of our top technology stocks we put on alert in March that has done extremely well is Kontrol Energy Corp (CSE: KNR) (OTCQB: KNRLF) out of Vaughan, Ontario. During the Covid-19 meltdown of the capital markets, we alerted KNR at $.25 cents a share and since then shares of KNR have rallied 724% to hitting a high of $2.06 on September 1st 2020. Although we put out our second alert on KNR at $.25 cents, we originally placed KNR on alert to investors around $.61 cents back in 2019, generating a return of 237% since we first alerted investors of Kontrol Energy.
Kontrol Energy has been making big waves lately and investors can tell by its recent trading activity and share price appreciation, and this is due to some spectacular developments the company has announced as of late. In early August, KNR announced that it has closed the acquisition of building energy and services platform company New Found Air. According to previous news releases, NFA has reported annual revenues of $3.7 Million and $843,000 of net income before tax with recurring contracts of approximately 40%. CEO of KNR Paul Ghezzi stated "NFA has a blue-chip customer base and a service business with growing recurring revenues. These customers represent a new organic growth opportunity for Kontrol's products and services”. This new acquisition has added another 100 buildings to KNR’s list of buildings in operation and will be a great way to add revenues on its balance, which should be seen in the upcoming quarters. Upon closing its new acquisition, Kontrol followed up the following day on August 5th 2020, announcing that KNR has received a grant of $50,000 from the National Research Council of Canada in order to accelerate its new Covid-19 testing technology called Kontrol BioCloud Analyser commonly referred to as (“BioCloud”). BioCloud is Kontrol’s newest technology that is aimed at detecting airborne pathogens such as Covid-19.
On August 10th 2020, KNR announced that the company has received initial positive lab results and KNR is now currently in the final stages of testing which the company is currently testing the BioCloud unit with live Covid-19 in the air. Chief Executive Officer of KNR Paul Ghezzi stated "We are pleased to announce that our detection mechanism, previously announced on August 5th, 2020, has completed its initial proof of concept test results. We have now validated that our detection mechanism can detect Covid-19 specific components in air samples under a controlled experiment,". If successful, KNR will be able to detect the presence of Covid-19 in the air and this could be a game changer not only for the company but also for the world that is currently struggling in reducing and containing the corona virus.
Detecting Covid-19 in the air is a very lucrative technology as its use is needed globally, and if KNR is successful, we would not be surprised to see shares of KNR rally into the double digits once the company receives positive test results from NRC and large purchase orders from large institutions or government entities. To the best of our knowledge, KNR is the only publicly traded company in Canada that is working on the detection of Covid-19 in the air and this gives KNR a significant first to market advantage. Being first to market also presents a great opportunity for shares to continue to rally as investors that want to invest in airborne detection technology may be left with one choice, and that choice is KNR. Recent developments coupled with its trading activity does remind us of the early days of SONA, a rapid testing company that we alerted at $.51 cents, which subsequently rallied to a high of $16.05 for an ROI of 3,047% in 4 months. If successful, KNR could play a pivotal role in the re-opening of the country and creating safe spaces which will be especially important as children return back to school.
Greenlane Renewables Inc.
The third green tech stock that we put out an alert on was Greenlane Renewables (TSX-V: GRN), a company focused on biogas upgrades for decarbonizing natural gas. Essentially, producing clean low-carbon renewable natural gas from organic waste. We first alerted investors of GRN back in March at a price of $0.21 cents per share and since then, shares of GRN have rallied to a high of $.57 cents for a total return of 171%. Since hitting its high of $.57 cents, GRN has pulled back a bit and it looks like GRN is consolidating and found support around the $.40 cent range.
In late June, the company announced $20.6 million in new contracts using GRN’s its biogas upgrading systems for multiple locations on dairy farms in California. The company stated that its first contract is for $17.1 million and its second contract of $3.5 million is however contingent on final financing approval. The President and CEO of GRN Brad Douville was quoted “This is a major contract win for us, representing over 185% of 2019’s revenue, for a showcase project in the California dairy industry that will meaningfully contribute toward the State’s greenhouse gas reduction targets”.
In addition to recent contracts, on July 7th 2020, Greenlane Renewables announced that the company has signed a contract with Grupo Cocal of Brazil worth $2.4 million. Grupo Cocal is a Brazilian sugar mill operator that produces ethanol biofuel from sugarcane. Chief Executive Officer of GRN Brad Douville stated “This represents our fourth contract for the supply of biogas upgrading equipment to customers in Brazil. We’re excited to showcase our system, which is ideally suited for this ground-breaking project, and to expand our relationship with Cocal”. Expanding into international markets such as Brazil is sure to further GRN’s presence in the country as this is the company’s fourth contract in Brazil.
On August 25th 2020, GRN reported revenues of $4.2 million for its second quarter which ended June 30th 2020 and represents an increase of 45% when compared to its first quarter results of $2.9 million. Greenlane Renewables also stated in its Q2 that the company has a sales order backlog of over $40 million, an increase of 159% from its previous report on December 31st, 2019 of $16.1 million. CEO Bra Douville stated “We successfully grew our revenue this quarter by 45% on a sequential basis while facing some tough marketplace conditions as a result of the COVID19 backdrop”. With sales orders backlogged and new contracts being awarded, these actions will further increase Greenlane Renewables revenues in the near future and additional contracts and news should send shares of GRN to climb again.
Since March, our top 3 green tech stocks had an average return of 347%, and we firmly believe that these three companies will continue to preform very well in the coming months, and we will continue to track their progress further into 2020.
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