Shares of water treatment company BQE Water Inc. (TSXV:BQE) are, ironically, quite illiquid
Capital Ideas Media | August 24, 2020 | SmallCapPower: ESG (Environmental, Social, and Governance) investing has become increasingly relevant, with this trend expected to continue to grow in the coming months and years.
(Originally published on Capital Ideas Media on July 7, 2020)
[Editor’s Note: Shares of BQE Water have appreciated 19% since Capital Ideas wrote about the company about six weeks ago.]
Larry Fink, CEO of BlackRock, the world’s largest investment firm with nearly $7 trillion in assets, said this year that sustainability will be at the center of its investment strategy going forward.
This is why shares of BQE Water Inc. (TSXV:BQE) caught our attention recently; that and the outsized returns this tiny Canadian company has delivered for its shareholders over the past five years (77% annually on average).
BQE Water provides water treatment services for the mining industry, focusing on producing clean water, reducing water risks and minimizing liabilities.
Although mining is essential for the goods we consume, the industry’s environmental impact will likely be subjected to increasing scrutiny in the coming years.
During 2019, BQE Water generated revenue of $5.6 million, a 30% increase year over year, with Adjusted EBITDA that grew 46% to $1.7 million.
About 60% of BQE’s revenues are recurring, from Top-Tier clients that include Glencore, Jiangxi Copper, Freeport-McMoRan, Kinross, and Centerra.
BQE Water estimates its revenue potential at approximately $1 billion during the next 20 years, presuming it adds two projects annually (this would still represent less than 0.1% of global market).
BQE’s stock-price performance during the past few years has been aided by the Company’s extremely-tight capital structure – just 1.3 million fully-diluted shares outstanding. This has, ironically, made this water-related investment quite illiquid.
This shouldn’t deter the small retail investor, though, if they are patient and avoid placing a Market Order to buy and sell the Company’s shares.
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