TOP IDEAS: Commercial sales of Questor Technology’s (TSXV: QST)
waste heat to power clean-tech solutions is a diversification
catalyst that could catapult this stock again.
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.
The stock price of Questor Technology Inc. (TSXV: QST - $0.78) has
gone on a roller coaster ride. Since our first blog post (See: Questor
Technology Inc: A small cap clean-tech company that makes money) the stock had
soared 1,215% to a high of $5.00 in 2014. Today shares in Questor
Technology trade at a fraction of its previous high, but that is not to say that the
stock price cannot move up once again.
Questor Technology is a leading provider of waste gas combustion
incineration solutions 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. To date the Company's incinerators have been
deployed all over the United States
plus in many other countries worldwide.
The demand for Questor’s clean-air incineration solutions has
heightened over the last several years. During this same period, interest in
its stock from investors has increased sharply as the Company exhibited
substantial year-over-year growth in both revenues and profits in 2014 from the
sale of its incinerators to Oil & Gas companies.
But with the collapse of world oil prices and the massive spending
cuts by the Oil & Gas industry, Questor’s business model needed to shift to
a greater focus on incinerator rentals than sales which, in the short-term,
impacted sales growth and profitability. Because the Company’s growth had slowed in 2015, Questor’s stock price dropped significantly over the past 12 months.
But is this stock poised to rise again? We think so.
Early in 2014, Questor Technology acquired ClearPower Systems Inc.
("ClearPower") and since that time it has invested funds to further
develop ClearPower’s technology that very efficiently transforms waste heat
from any source into power.This
technology creates an opportunity to realize "zero-emission power” by utilizing
the heat generated from efficient combustion, which can be been used for water
vaporization, process heat and power generation.
Recently the Company reported that testing for the prototype
ClearPower waste heat to power generator units was completed and the results
exceeded expectations, making the product commercial-ready. ClearPower’s
technology is positioned to capture the under-served waste heat to power market
(under 1 Mega-Watt) and is a cost-effective solution to generate power from
dirty gas in a variety of applications, including landfills, water and sewage
treatment, tire recycling and agriculture. According to the Company, it is
anticipated that the first commercial sales for its waste heat to power
technology solutions could occur in the first half of 2016. First sales are
likely to industrial companies operating in Ontario
jurisdictions that have banned coal power generation.
We believe that the Company’s waste heat to power technology greatly
expands the market opportunity and thus investment value proposition for
Questor Technology as a diversified clean-tech growth company. If the Company
can demonstrate that its future growth prospects are not only tied to the oil
and gas market, this would serve as a significant catalyst for Questor’s
Of note: During the oil industry downturn, the Company has
maintained a strong balance sheet with cash in the bank and no debt.
Questor Technology has approximately 26 million shares outstanding.
The Company’s website www.questortech.com
Author Ownership Disclosure: TSXV: QST- YES
This article is for informational purposes only. This article is based on the
author's independent analysis and judgment and does not guarantee the
information's accuracy or completeness. The information contained in this
article is subject to change without notice, and the author assumes no
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information contained within this article should not be construed as offering
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Investorfile.com is not engaged in an investor relations agreement with Questor
Technology Inc. nor has it received any compensation from Questor Technology
Inc. for the preparation or distribution of this article.
The author of this article has acquired and may trade shares of Questor
Technology Inc. through open market transactions and for investment purposes