Source: Clive Maund 03/18/2022
A green tech company that has developed technology to transform hydrocarbon waste such as tires into renewable commodity products is at another very good buy spot, analyst Clive Maund says.
I recommended Ecolomondo Corp. (ECM:TSX; ECLMF:OTC) just over a month ago, and although it has made no net progress since then, it is worth highlighting it again here because it is at another very good buy spot and its fundamental situation continues to improve. In this update, we will also consider briefly the positive fundamentals, not least of which is a multi-million dollar offtake agreement for recovered carbon black the company just announced.
Ecolomondo has developed technologies for the efficient processing of hydrocarbon waste, especially old tires, into useful products. While others have attempted this in the past, none have developed processes that are as comprehensively efficient as those of Ecolomondo. After perfecting the processes at a pilot plant, the company has now moved on to building TDP (Thermal Decomposition Process) turnkey facilities that are producing rapid results.
As the company sets out in a Feb. 1 press release, the facility processes an amazing quantity of tire waste per year, producing an equally amazing quantity of useful products — “Comprising four different processing departments (shredding, thermal processing, recovered carbon black processing, and oil fractionation), the facility is expected to process a minimum of 14,000 tonnes of tire waste per year when fully operational, producing 5,300 tonnes of recovered carbon black, 42,700 barrels of oil, 1,800 tonnes of steel, 1,600 tonnes of process gas, and 850 tonnes of fibre when operating at full capacity.” While it can be argued that long-term the globalists will greatly reduce the world population and force those who survive into heavily surveilled urban ghettoes where they won’t go anywhere so there will be far fewer motorists and much less tire waste, that’s still a long way off and there are an awful lot of old tires and other waste for the company’s facilities to work their way through in the meantime.
While the products resulting from the processing of hydrocarbon waste should be a bountiful source of revenue for the company, it is worth taking into consideration that the company will also earn revenue from taking in this material. With respect to old tires there is a fee called a “tipping charge” in the U.S. and the company looks set to earn enough solely from taking in these waste materials to finance the building of new plants.
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Turning now to the stock charts you may recall that in the original article posted in February we looked at the long-term six-year chart, but in this update we’ll start by looking at a two-year chart, so that we can see last year’s dramatic bull market and the subsequent heavy reaction back to strong support in somewhat more detail.
On the two-year chart we see that the bear market from the peak last September shaved two-thirds off the value of the stock but since December it has stabilized above the strong support shown and appears to be basing ahead of renewed advance. Downside momentum has dropped out and the volume pattern and both volume indicators (Accum – Distrib shown on eight-month chart) are positive, supporting the contention that the current basing pattern will lead to a new bull market, which certainly looks probable given the fundamentals.
The conclusion is that with Ecolomondo looking more and more likely to begin a new bull market, it is more of a buy here than it was when we first looked at it, so we stay long and it is rated a strong speculative buy here. A point worth noting is that although the number of shares in issue may seem rather high at 183 million, about 76% of them are owned by management/insiders. Although listed on the OTC, trading on this market appears to be nonexistent at present.
There is more fundamental information on the company and its activities in Clean Tech Co. Gives New Life to Old Tires by Colby Mintram.
Ecolomondo Corp, ECM.V, ECLMF on OTC, closed at C$0.49, $0.46 on March 15, 2022.
Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years’ experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.
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Charts provided by the author.
The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.