Originally published on 5th of May 2023
ESGFIRE returns since 2018: + 1100 %
ESGFIRE returns year to date 2023: + 2%
NASDAQ returns year to date 2023: +19 %
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Portfolio comment for April 2023
April saw the ESGFIRE portfolio take a hit for the worse with Absolicon, Gomero and Biofrigas to mention a few of the drainers.
We believe especially Earthrenew may have a positive run short term due to the encouraging words from the management discussion of their financials. Management mentions a strong possibility of licensing revenues becoming a major part of the strategy going forward which could provide much well needed non diluting cashflow ! We have therefore chosen to increase our position.
The portfolio remains 100 % invested at this point. We have seen many former portfolio companies in pre revenue stage decrease in value by more than our own portfolio. The reasons vary however in this new market condition valuations and a well funded business have become increasingly more important than ever before.
Gladly on the makro front Inflations seems to finally be coming down which should provide a warm welcome from central banks around the world. In turn this definately is good for stocks which has seen major indexes have a great run lately.
Current ESGFIRE portfolio with Monthly performance for March 2023.
Absolicon
April performance: – 29 %
Market comment:
Sadly the high interest environment seems to finally be taking it’s toll on Absolicon. The company has previously withstood alot of the downfall for growth companies but reality seems to be catching up due to cashflow still being negative.
Absolicon were unfortunately only able to raise 43,4 million SEK out of a planned 120 million SEK. On the bright side however this means less dilution for existing shareholders and an increased sales focus for the company. Absolicon have responsibly began some restructuring to lower cash burn and planned less projects in conjunction to delivering the 2 production lines ordered last year by customers.
For 2023 we hope there will be a “ketchup effect”and a potential of 3-4 production lines being sold totalling $20-25 million USD in revenues. Absolicon have signed in total 21 framework agreements and totals a sales pipeline exceeding $120 million USD. One production line should produce one off revenues of 4-5 MUSD and recurrent revenue of 3-4 MUSD annually.
Biofrigas
April performance: – 15 %
Market comment:
Biofrigas have had a rough april due to macro related trends which have been negative for Biogas in the European Union. We hope to see a new government support act of Biogas in Sweden shortly which should be positive for the sales of the company. We are also positive that Biofrigas are entering the german market where there is a big need for their products.
Earthrenew
April performance : + 10 %
Market comment:
Earthrenew has agreed to part ways with current CEO Keith Driver and have lowered guidance for 2022 from 27 million CAD to 17 million CAD. Although ofcourse extremely dissapointing short term we think this might prove a great buy opportunity for patient investors. To be fair we were extremely dissapointed to learn recently that Keith Driver had signed up as CEO for another ESG company raising funds namely Impact Carbon Capital. We think Keith was probably fired due to this reason and all we can say is good riddance since the CEO performance lately has not been stellar to be frank. We look forward to see what the new CEO Neil Wiens can do !
Having read managements analysis of the financial report for 2022 we think there may be a strong possibility that licensing revenues can become a major part of the companys strategy to fund their new facilities. If we are correct this cashflow would provide much well needed non dilutive financing!
Vicinity Motor Corp
April: +- 0 %
Market comment:
Vicinity Motors had a rough financial report for Q4 2022 due to supply chain issues. Looking forward the company still has an impressicve $150 million USD backlog and with a recent credit line of $30 million USD and finally having the new US facility in Ferndale open we hope 2023 will be a great comeback for Vicinity Motors! The company has during April added a further 9 million in financing which greatly should help the ongoing production of the new VMC 1200 class 3 truck!
Norditek Group
April performance: – 5 %
Market comment:
Norditek has had a great start to 2023 with a wooping performance of 104 % returns. The company stock performance has exceeded our expectations. The latest financial report however was more normal in terms of revenues due to the comparable quarter last year having one off revenues which was an effect of supply chain issues. The stock magazine Börsveckan recently issued a purchase recommendation.
Clean motion
April performance: +- 0 %
Market comment:
Clean motion during march announced super interesting sales cooperation with one of Israels largest car dealerships. This small Swedish company has a hyper interesting last mile delivery vehicle. There are several peers valued at 10-20 X the market cap of Clean Motion. The company has begun taking orders for their new last mile delivery vehicle which has solar cells on the roof and charges itself! The company currently has capacity for 500 vehicles per year which implies 5-6 MUSD revenues per year however the plan is to scale this up to 5000 vehicles per year before the end of 2023 which equals roughly 50-60 MUSD per year. The company made an update recently that they expect production to begin in March 2023 in parallel with the work for European type approval the latter is expected to be finished in april 2023. We have however not had any update of the european type approval in april so we hope to see something very soon!
Landi Renzo
April performance: +- 0 %
Market comment:
This hydrogen and RNG mobility company is set for massive growth and is extremly undervalued with more than 100 % upside. We published a guest article in March at Börsvärlden which can be read here.
We recommend you read THIS analysis on the company for more information.
Gomero Group
April Performance: – 10 %
Market comment:
The latest report from Gomero was a dissapointment as growth was below 10 % ( 8 %) . We will wait to revise our projections until we see the results for Q2 of 2023. Gomero has a history of weak Q1 reports and stronger Q3-Q4s so we were not completely shocked by the result. An interesting aspect to note is that they now have begun reporting the different revenue streams where subscription revenues are growing Our investment case is based on a growth assumption is a year over year organic growth between 20-30 %.
Ekobot
April Performance: – 10%
Market comment:
We were not surprised to see Ekobot share price drop a bit after their latest share issue which gave the company 26,8 million SEK. We are however a bit surprised to see the share price trade below the share issue of 2,50 SEK. We think the risk reward on current levels is attractive as the core business deducting cash at hand is valued at only 10 million SEK / $1 million USD.
IPO positions
We have a number of positions in unlisted companies which we anticipate will go public through initial public offerings within the next 6-18 months.
Evanesce packaging solutions
Website: https://evanesce.com/
About:
As a sustainable technology innovator,Evansesce is revolutionizing sustainable packaging with 100% compostable and affordable plant-based solutions.
IPO Status:
ESGFIRE and those of our readers who invested in the company entered at a valuation of 30 MCAD implying a likely 12-24 X upside to our initial investment. The company is likely going public in the third or fourth quarter of 2023 on one of the Canadian stock exchanges or NASDAQ.
Captico2
Website:
https://captico2.com/
About:
The vision of Captico2 is to be the world leading in offering high impact Carbon Capture Utilisation and Storage technologies (CCUS). Captico2 can capture mineralize and transform carbon dioxide into a valuable and sellable commodity in less than 60 seconds. The company aims to pre-sell 10 full scale units in 2022 creating potential revenues of 160 million EUR. The company currently has a 500 million USD sales pipeline.
IPO status:
Captico2 is currently undergoing restructuring and IPO plans have been postponed for a few months.
Ola Media
Website: https://www.olamedia.mx/
About:
OLA MEDIA is a network of interactive touch screens located exclusively in the backseat of Ubers. By leveraging innovative technologies and captivating spaces, they help brands create engaging experiences with a high value audience.
IPO status:
Ola Media is currently closing a capital round which implies a 300 % upside for our initial investment. The company is likely going public during the second quarter of 2022 at either Canadian exchanges or NASDAQ.
Alchemy
Website: https://alchemynano.com/en/
About:
Alchemy is developing innovative nanocoating solutions to the challenges faced by many industries. Their coatings are designed to repel water, dirt, and ice while maintaining the high transparency, mechanical durability, and weatherability specifications for advanced sensor systems used in harsh environments. The company has a deal with the Canadian army and this may be further increased during this fall which could imply a 3-5 X valuation of our initial investment.IPO status:
Most likely going public by Q3 of 2022 .
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The stock price development above was calculated by taking the opening price at the first day of the month and the closing price at the last day of the month.
We own shares of these companies personally.
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