TOP IDEAS: The push to slash
methane gas emissions and the diversification of applications for its advanced
clean-air technologies will drive the growth for Questor Technology (TSXV: QST) and
propel the stock price once 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.
It goes without saying that the stock price
of Questor Technology Inc. (TSXV: QST - C$1.57) has had its ups and downs like
its customers in the Oil and Gas industry. Following our introductory blog post
(See: Questor Technology Inc: A small cap clean-tech company that makes money),
the Company’s stock soared 1,215% to a high of C$5.00 in 2014. A year later,
with the first collapse of world oil prices, the stock traded down to a
fraction of those highs. Then, with the return of rising oil prices, coupled
with the enforcement of stricter methane emission regulations in the US, the
demand for Questor’s clean-air incineration solutions heightened from Oil and
Gas producers and the Company’s stock soared again: Up in value 1,374%, with a
closing price as high as C$5.60 early in 2020. Then COVID-19 hit, which led to
another collapse of world prices, followed by the massive spending cuts by the
Oil and Gas industry and Questor’s stock price crashed down again, near to its
current trading levels.
But will the stock price start its
path to recovery yet again? We think so, and beginning relatively soon.
Questor Technology is focused on clean-air technologies that safely and
cost-effectively improve air quality, support energy efficiency and greenhouse
gas emission reductions. Questor designs, manufactures and services
high-efficiency waste gas combustion systems. The Company's proprietary
combustion technology is utilized in the effective management of methane,
hydrogen sulphide gas, volatile organic hydrocarbons, hazardous air pollutants
and BTEX (benzene, toluene, ethylbenzene and xylene) gases, ensuring
sustainable development, community acceptance and regulatory compliance.
Today the Company’s clean-air
technology offering of products and services has evolved to become a complete
emission reducing package.
The first step is for a producer to have
its waste gas collected using Questor’s patented incineration technology,
"Q-Series,” which eliminates 99.99% of harmful pollutants. The Company’s
incinerators is best-of-breed technology which meet or exceed all regulatory
standards without emitting any smoke, odour, or visible flames for lowering
emissions and satisfying current and future environmental standards.
To help verify waste gas collection
for regulatory bodies while enhancing social compliance, Questor Technology
offers a cloud-based product to provide continuous and real-time emissions data
monitoring and analysis, called "Q-Insight." This platform provides a
reporting vehicle to increases emissions transparency for producers (and their
investors) and to more effectively monetize pollution reduction activities
through carbon offsets and trading.
Finally, Questor Technology offers
power generators "Q-Power” that turns waste heat into operational savings. The
Company’s systems are designed to efficiently transform otherwise wasted high-
and low-temperature heat into valuable electricity power, which can be used by
producers on-site or transferred to a power grid. This technology creates an
opportunity to realize "zero-emission power” by utilizing the heat generated
from efficient combustion.
While Questor Technology’s continued
revenue growth generation has had some bumps in the road due to oil price
volatility, the Company has always managed to recover from these setbacks
stronger than ever. Therefore, we think it will happen again, which is good for
While historically the bulk of
Questor’s waste gas combustion systems have
been deployed at oil and gas fields, its emission-reducing system can process
any type of waste gas from a variety of industries, which greatly expands the
market opportunity and thus investment value proposition for Questor Technology
as a diversified clean-tech growth company. That said, if the Company can
demonstrate that its future growth prospects are not only tied to reducing
emissions in oil and gas fields, this would also serve as a significant
catalyst for Questor’s stock price.
We see the early signs of progress that
Questor Technology is making in diversifying its markets. As such, its first
project is at a waste water treatment plant in Colorado, a biogas-conditioning system that
is using Questor’s clean combustion technology to safely and cleanly handle the
waste gas stream left over after the renewable natural gas is extracted from
the produced waste gas stream at the water treatment plant. Also, Questor
Technology recently announced it has received a purchase order from Glass WRX in
for its 200-kilowatt heat-to-power generator. The
heat-to-power generator converts waste heat from Glass WRX’s production processes
into enough renewable, emissions-free electric power to satisfy the majority of
the plant's electrical requirements.
The biggest green
mandate push is coming from the drive to slash methane gas released into the
air. Questor's incinerators
are capable of cleanly combusting waste gas streams at 99.99-per-cent
efficiency from many sources, such as landfills, waste water treatment, oil and
gas, while ensuring no harmful pollutants and methane are emitted. The
Company’s products are the first environmental technology to be verified by an
ANSI National Accreditation Board (ANAB) accredited verifier to the ISO
14034:2016 environmental technology verification (ETV) standard.
But most importantly there is now the
realization by governing authorities that the capture of methane gases is the
low-hanging fruit to achieving lower greenhouse gas emissions, given that clean
technologies like Questor’s is readily and economically available today. Last
week, the Canadian Government announced C$750 million of funding to oil and gas
companies in Canada
to slash methane emissions. In the State of New Mexico, regulators are developing what could become the
strictest standards in the USA
to regulate the volumes of methane released into the environment by oil and gas
No doubt in the short-term Questor
Technology will continue to pursue opportunities in the oil and gas industry as
regulators, investors and companies focus on methane emissions and air quality.
This year, the Company’s financials
will reflect the downturn in the Oil and Gas industry due to COVID-19. That
said, Questor Technology’s past profitability has afforded the Company to
maintain a very strong balance sheet with a sizable amount of cash holdings in
the bank and no debt. Financially this positions Questor well to take advantage
of the enormous opportunities for the Company which lies ahead.
For investors big and small, Questor
Technology remains one of Investorfile's Top Ideas and is the most relevant technology play today for making a socially
responsible investment that promotes the reduction of greenhouse gases for our environment.
Questor Technology has approximately
27.3 million shares outstanding.
The Company’s website
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