TOP IDEAS: Questor Technology Inc. (TSXV: QST): Stock’s meteoritic rise is in part due to the prudent management of growth.

Note: Investorfile’s share price accumulation target of $0.65 for Questor Technology Inc. was reached on June 3, 2013. For the record, we do not revise share price targets for our Top Ideas – Small Cap Value Stocks. We have positioned our blog to be one of the first providers for a pragmatic perspective of a small cap company stock’s potential worth, where there may be uncovered value that has been largely overlooked by the investment community.

Eight months ago we circulated a blog post to our Investorfile members about Questor Technology Inc. (TSXV: QST - $2.11). In that blog post we wrote that this clean-tech small cap stock maybe only in the early stages of its value appreciation despite that its shares had hit our price accumulation target we set the year prior (See: Questor Technology clean-air solutions are good for the environment and shareholders.) Since that blog post 8 months ago, Questor’s stock value to date is up 225%.

Questor Technology is a leading provider of waste gas combustion incinerations solution to improve air quality. The Company’s proprietary incinerator technology, which is safe, reliable and very efficient, is deemed a best-of-breed clean-air solution for oil and gas producers needing to comply with stricter EPA emission regulations in the US and new zero-flaring regulations internationally. 

Questor’s incinerator technology is receiving worldwide attention with recent confirmed orders coming from customers operating in Canada, France, Germany, Russia and the US. In the Company’s most recent corporate presentation the preliminary financial outlook indicates that sales have jumped dramatically in 2013, with cash flow and profits more than doubling from the previous year.

No doubt that the demand for Questor’s clean-air incinerations solutions has heightened. So too is the interest in the Company and its stock from a wider investor audience. Combined, these forces gave Questor Technology stock its meteoritic rise.

But the underpinning for the stock’s rising share price is a result of practical decisions made several years prior by the Company’s management. The majority of small cap clean-tech companies are run by CEOs with dreams about the global sales potential of their green technologies, but not how to operate profitably. At Questor, the Company’s CEO executed a sensible business plan to finance growth from internal cash generated. 

Three years ago, the Company was already profitable on a mere $4-$5 million in annual sales. For the last several years, Questor did not need to raise capital thus avoiding dilutive equity financings when the Company’s stock price was low, which today would limit Questor’s share price appreciation potential.

Fittingly, the stock is up 455% since we first recommended the purchase of shares in Questor Technology as a small cap value investment opportunity (See: Questor Technology Inc: A small cap clean-tech company that makes money.)

Questor Technology has approximately 25.2 million shares outstanding. The CEO of Questor owns 14.9% of the Company.

Questor Technology website www.questortech.com

Author Ownership Disclosure: TSXV: QST- YES

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