CleanTech company Biorem won strong order bookings in the past 2 years. Profits should surge, and the P/E should drop to ≤5x when it delivers those orders.
Thanks, Robert! Fingers crossed, that the thesis plays out.
I regard Biorem as a successful niche operator at the moment. The win rate (38-46%) on requests for proposals (RFP's) is phenomenal. The company has innovative products and a strong reputation that help in gaining (follow-on or repeat) orders with customers.
It's probably a bit premature to talk about a moat, though, given the small size of the company. Moreover, the equipment sale business model implies that Biorem needs to win RFP's constantly, just to keep revenue stable.
As a stock investment; I like the ingredients:
>> niche operator,
>> industry growth tailwinds from environmental regulations,
>> great capital allocation (the ROIC on 'normal' revenue has been excellent!),
>> very low valuation IF Biorem delivers the backlog and grows from there.
The business has been somewhat lumpy though, and is heavily reliant on new equipment sales. That increases the risks.
The other Canadian company I mentioned here on substack, Sylogist, has much more of the obvious characteristics of a business with a 'moat'. Once clients are on its software, it is very tough for them to switch to another provider.
Sylogist has been working hard to improve the product portfolio and customer service. It is now launching the new products. That seems to be driving a new growth phase for the company, which is not yet reflected in the stock valuation. Here I see a chance to buy a 'moat' at a discounted valuation.
Great article! How would you describe their most?
Thanks, Robert! Fingers crossed, that the thesis plays out.
I regard Biorem as a successful niche operator at the moment. The win rate (38-46%) on requests for proposals (RFP's) is phenomenal. The company has innovative products and a strong reputation that help in gaining (follow-on or repeat) orders with customers.
It's probably a bit premature to talk about a moat, though, given the small size of the company. Moreover, the equipment sale business model implies that Biorem needs to win RFP's constantly, just to keep revenue stable.
As a stock investment; I like the ingredients:
>> niche operator,
>> industry growth tailwinds from environmental regulations,
>> great capital allocation (the ROIC on 'normal' revenue has been excellent!),
>> very low valuation IF Biorem delivers the backlog and grows from there.
The business has been somewhat lumpy though, and is heavily reliant on new equipment sales. That increases the risks.
The other Canadian company I mentioned here on substack, Sylogist, has much more of the obvious characteristics of a business with a 'moat'. Once clients are on its software, it is very tough for them to switch to another provider.
Sylogist has been working hard to improve the product portfolio and customer service. It is now launching the new products. That seems to be driving a new growth phase for the company, which is not yet reflected in the stock valuation. Here I see a chance to buy a 'moat' at a discounted valuation.
Oeh I'll look into Sylogist then! Thanks for your extensive reply!!