June 2022 – Originally published on July 14th 2022
ESGFIRE returns since 2018: + 1100 %
ESGFIRE returns Year to date 2022: -19 %
Equity markets have remained extremely volatile and makro signals are still bearish since our last update but with some positive signals in reduced price for many commodities which could indicate that we have seen peak inflation. Markets and investors were a bit shocked by yesterdays CPI numbers that came in over expectations at 9,1 % year over year as compated to projections of 8,8 %.
One a positive note we can see that gasoline prices have dropped significantly along other indicators such as Wheat , lumber and metal prices. However the fact that copper prices are dropping significantly is unfortunately a recession warning. Copper has been a historical indicator of upcoming recessions.
Professor of finance at the University of Pennsylvania’s Wharton School of Business told CNBC yesterday that ““The market is starting to believe that truly this is the peak number and that there are enough inputs that have rolled over that we could start to see inflation numbers subside in the coming months,” said Andrew Slimmon, senior portfolio manager at Morgan Stanley Investment Management. “If you look at the history of when we’ve had these inflation spikes, stocks tend to bottom when the market believes that inflation has topped out.””
ESGFIRE had a thesis (which we thank our investor friend Paul Andreola for originally coming up with) that we may possibly be in a situation where markets have bottomed out at this stage seeing as the equity markets went from big drops shortly after yesterdays CPI was released and almost ending on green on many North American indexes (july 13th 2022). Sharp rises on bad news is often a signal that the market has priced in and is beginning to turn. We can also see that there is a very large record volume in shorting the North American Equity markets right now which historically also has been an indicator of the market bottom.
However we want to be clear we are not sure we have seen the bottom yet, we can only say that some indicators indicate that we may be there yet and that we have seen peak inflation. There are unfortunately many possible events that could send the market further down such as a credit crunch due to higher rates, liquidity issues on the market, monkeypox pandemic exploding and the ongoing COVID wave forcing economies into lockdown. Last but not least China has been rumbling in the east against Taiwan, and should we see a chinese invasion of Taiwan it will make the Russian invasion of Ukraine look like nothing when it compares to how it will effect equity markets.
Monkeypox global update:
Cases are rising globally at an alarming rate despite little notice being take in mainstream media at the moment. There are currently over 10 000 cases of Monkeypox globally, compare this to a total of 2000 cases which was reported over a 30 year period before this new global outbreak emerged in May of 2022. The World Health Organization are still sleeping on the Monkeypox issue despite the fact that those who are in risk of getting most sick and even die from the disease are young children, pregnant women and immonucompromised. Recently we saw the first case of a school shutting down due to cases of Monkeypox discovered in an english primary school.
We hope that WHO will act next week on july 21st and declare Monkeypox an official pandemic so that coordinated efforts can start to contain the global outbreak.
The ESGFIRE portfolio remains liquid with a cash position of 55 % and a large hedge position in the worlds only Monkeypox Vaccine producer Bavarian Nordic, which also happens to have a very promising COVID-19 booster which should be ready for commercial stage by Q4 of 2022. We have also due to the changed market conditions begun to phase out companies that are far from substantial revenues.
We have also slightly increased our positions in Compleo Charging solutions despite the expected market turbulence as we think this companies will outperform in the current market. We think it will become increasingly more vital for investors in high growth companies to pick stocks that have a well funded business as capital markets are becoming harsher due to fears of recession.
Current ESGFIRE portfolio with Monthly performance for June 2022.
Absolicon – Down 14 %
We were dissapointed not to see any sales by Absolicon during June of 2022 however the company did release a bunch of statements updating the market on how their projects are progressing. All projects appear to be moving forward and we expect to see them close one or more deals before the end of 2022. Absolicon have signed in total 18 framework agreements and totals a sales pipeline exceeding $120 MUSD. We are waiting for the first framework agreement to materialize which alone should produce one off revenues of 4-5 MUSD and recurrent revenue of 3-4 MUSD annually. We expect even more massive interest for Absolicon’s solutions following the European Union ambitions to speed up its energy dependance of Russian fossile fuels.
Aduro Clean Technologies – Up 30 %
Aduro is moving closer and closer to commercial phase with some appreciation from the market . The company has during April closed a successfull and oversubscribed private placement which adds gross proceeds of C$2,352,666, which exceeded the previously announced funding target of C$2 million. Aduro also during April announced the hiring of engineering firm Rally which we have written a previous post about and can be found on Aduro’s corporate page on our website.
Char Technologies – Down 19 %
Char Technologies recently finished a private placement which gave them gross proceeds of C $4,894,881. The company’s stock has gone down close to 60 % YTD , this downward spiral is likely due to a change of sentiment for growth stocks. Char has a sales pipeline of about 100 MUSD and it should become to materialize into sharp deals within a not too distant future. We think a lot is happening behind the scenes and would not be surprised if big news materialized in due course.
Desert Control – Down 8 %
Desert Control is constantly adding new team members for their growth which we view as a great sign. Desert control is now in commercial stage! The company has announced that they have entered commercial stage in the Middle East and launching validation initiatives in the United States. We are satisfied with the latest development of this unique ESGFIRE portfolio company.The company is gaining more and more news as fertilizer prices are exploding upwards and the need for alternative methods are being sourced globally.
Earthrenew –Down 37 %
The ESGFIRE portfolio got smacked for buying more stocks at 30 cents just as the company announced a new private placement. Earthrenew has impressed us with great financials and also the launch of their new processing facility Beiseker. Fundamentals are very sound with increasing revenues.
Lion E-mobility – Up 9 %
The company recently impressed us with a HUGE order for 2022 that was 48 million euro in size, much larger than their current market cap. The current harsh climate for micro caps is clearly visible since the big order was not permanently reflected in a higher share price. The chairman of Lion E-mobility also recently invested a large sum of money into the company to finance their expansion which we view as a very bullish sign. Lion E mobility recently announced an impressive battery cooperation which should generate revenues. The company is keeping shareholders regularly updated with investor events which we find reassuring. The company has also finished the deal with BMW for their own serial production of batteries.
Vicinity Motor Corp – Down 16 %
Vicinity Motors is still getting punished by the market heavily despite good news of new distributors. Vicinity Motors shocked the market with a capital raise that sent the stock down with more than 26 % on a single trading day in March. We think that event was a mix of overreaction and punishment for the management’s decision not to let current shareholders participate in the financing. However The company recently received analyst coverage from Catalyst research and Spartan capital indicating 15-32 CAD as a price target constituting extremely large upside from current levels.
Leading Edge Materials Corp – Down 15 %
We hope to soon see some revenue generating news as the company is about to start production in one of their projects which should prove to be a major positive catalyst. The company also could have some short term catalyst coming up within the next few months. It is possible the company may fall further since they are in pre revenue stage.
Hydrogenpro – No change
Hydrogenpro continues to impress us with new orders. On April 19th they announced an order exceeding 3 MUSD for electrolyzers from Mitsubishi heavy industries.
It’s also worth mentioning that the initial order of 50 MUSD from Mitsubishi power Americas has now been converted into an actual purchase order which is the largest of its kind for electolyzer systems ever. The stock however , in our opinion, is even more undervalued at current levels with this order which proves their concept is working than when it was trading at around 12 NOK. Conviction is high for us with this position as Hydrogenpro aim to deliver hydrogen at a cost of 1,2 USD per kilo in 2022.
Envirometal – Down 27 %
EnviroMetal Technologies Inc. is developing and commercializing economic and environmentally sustainable metal recovery technologies for applications in the primary and secondary metal industries. EnviroMetal extracts precious metals from ores, concentrates and E-Waste by deploying its proprietary non-cyanide, water-based and neutral pH treatment process. Extensive analysis by ESGFIRE is coming shortly! The company stock has been hit big time by the massive market sell off which we think is an overreaction.
Fusion Fuel – Down 18%
There are many interesting projects which we think could give positive catalysts for this stock in the coming months. However currently the stock has been hit hard by the massive market selloff.
FUSION-FUEL’s mission is to provide the world with innovative green hydrogen solutions that accelerate the transformation of the global energy sector and enable the sustainable reduction of carbon emissions.FUSION-FUEL has developed a revolutionary new electrolyzer design – the HEVO – that will allow them to produce hydrogen using renewable energy at highly competitive costs without any associated carbon emissions.
Compleo Charging Solutions – Down 26 %
Compleo Charging solutions has so far not announced any problems with supply chain issues due to covid lockdowns in China and we hope that this will remain the case however it’s a risk that needs to be considered as it could slow down revenue growth.. They are expecting to deliver 150-160 MEURO in sales for 2022. The company is growing fast both organically and through acquisition. The company recently stated they aim to turnover half a billion Euro by 2025. More can be read under the Compleo corporate page. The stock price of Compleo has been hit very hard and is down 72 % so far during 2022. The company recently announced they had received a payment of 45 million euros from E.ON related to a recent acquisition. This payment along the current cash position makes us very confident that the company will be able to stay afloat until they turn cashflow positive or close to this stage.
Bavarian Nordic is a fully integrated vaccine company focused on the development, manufacturing and commercialization of life-saving vaccines.
The company currently has the only vaccine approved for all age groups in Monkeypox and are also working on a promising COVID-19 booster which will be most likely read by Q4 of 2022.
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
As a sustainable technology innovator,Evansesce is revolutionizing sustainable packaging with 100% compostable and affordable plant-based solutions.
Likely going public in the first quarter of 2023 on one of the Canadian stock exchanges.
Expected returns: Current estimate is that the round our community invested in will return somewhere between 10-15 X our original investment.
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.
Captico2 is about to close their current 10 MUSD financing which will enable them to proceed with their TRL 7 testing. After the TRL 7 is finished they have a written order of 10 units totalling 160 million EURO with a possible net profit margin of 20 %.
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.
Likely going public during the second quarter of 2022 at either Canadian exchanges or NASDAQ.
Expected returns :We expect our community to materialize somewhere around 400-500 % returns on the investment round on which we made our original investment.
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.
IPO status: Most likely going public by Q3 -Q4 of 2022 .
The stock price development above was calculated by taking the opening price at the first day of May and the closing price at the last day of May.
We own shares of these companies personally.
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