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19
The stars are aligning for Questor Technology and its clean-tech solutions
Posted by: Gerry Wimmer
11/19/2017
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The meteoric rise of Questor Technology’s (TSXV: QST) stock could test historical highs next year based on financial trends and industry tailwinds. Share price up 245% in 2017.





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.


Over the years,the Investorfile blog may have sounded like a cheerleader, but our enthusiasm for Questor Technology has never waned as one of our Top Ideas because of the Company’s prudent management team and superior clean-tech technology. Our proclamation at the end of 2016 that this stock is poised to rebound in 2017 (See: Investorfile predictions for 2016 perform well. Looking forward to 2017) is proof that our intuition and patience with this investment story is well-rewarded.

Questor Technology (TSXV: QST - $2.45) is a leading provider of waste gas combustion incinerations 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 emission regulations. To date, the Company's incinerators have been deployed all over the United States and Canada, as well as in many other countries worldwide.

Back in 2014 this stock soared to just over $5.00 per share. Shortly after the stock hit its highs,world oil prices started collapsing and what followed were the massive spending cuts by the oil and gas industry (Questor’s main customers). The next two years the Company’s stock price fell to trade at a fraction of those highs. But the Investorfile blog believes that the stars are aligning again for Questor Technology and this time the momentum maybe stronger then ever.

No doubt the recovery in the North American oil industry this year has been a catalyst for this stock. That said, what is really stimulating the Company’s recent financial performance is the enforcement of waste emission regulations (most notably in the state of Colorado) and the introduction of Questor’s hybrid incineration technology.

The Company’s hybrid incineration technology allows its oil and gas customers to purchase a base level of capacity and rent additional capacity to meet the shorter-term demands of high initial production. The benefits are lower capital and operating costs, reduced lease footprint, and clean enclosed combustion to meet stringent emission regulations that are starting to be strictly enforced at a state-level in the USA.

Due to the increase in drilling activity, there has been a heightened demand for rentals of Questor’s waste gas combustion incineration solutions to improve air quality. The proof: Questor Technology reported that revenue for the nine months ended September 30, 2017 was $12.6 million versus $4.6 million in 2016, which is $8 million higher: A 175% increase. More importantly, the higher revenue has translated into significant profits. The Company generated adjusted EBITDA of $4.7 million and net income of $2.8 million, or $0.11 per share in the first three quarters of 2017.

Looking forward, the Company has said that,based on the continued strong demand for its clean-tech solutions in the United States,it has doubled its capital investment budget to $6.9 million this year to significantly increase its rental fleet of hybrid equipment. Of note, the Company says its capital spending is financed by its cash-on-hand. Questor expects that other states and provinces in North America will soon adopt waste emission regulations legislation similar to Colorado.

In our blog post earlier this year we suggested that Questor Technology is ideally positioned to deliver a strong rebound in its financial results for 2017 and, therefore, the stock price could soar again (See: Questor Technology is on the rebound and so is the stock price). We were right: The share value is up 245% year-to-date. But we also put forward the question as to whether the stock could reach its all-time highs of about $5.00 in the future? Based on Questor’s recent momentum, we could see it happening in 2018.

The Company has maintained a strong balance sheet with cash in the bank and no debt.

Questor Technology has approximately 26.4 million shares outstanding.

The Company’s website: www.questortech.com

Author Ownership Disclosure: TSXV: QST- YES


Read Disclaimer:

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 responsibility to update the information contained in this article. The information contained within this article should not be construed as offering of investment advice. Those seeking direct investment advice, should consult a qualified, registered, investment professional. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock.

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 only.

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Hi Gerry, Your philosophy is focused on principles that have been shown to produce above average results over time and your record has clearly proven that. Congratulations on a great blog and thank you for the hard work that you do in sharing and updating your ideas; it is much appreciated.