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
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.
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.
(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
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.
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.
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.
Company has maintained a strong balance sheet with cash in the bank and no
Technology has approximately 26.4 million shares outstanding.
Company’s website: www.questortech.com
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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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