Feb 19, 2021
Greenlane Renewables (TSX: GRN) just uplisted to the TSX. What now?
Headquartered in British Columbia, Greenlane Renewables Inc. is a global provider of low-energy biogas upgrading systems, as well as pipeline and vehicular grade renewable natural gas (“RNG”). The stock recently uplisted to the TSX Exchange on Wednesday, and has seen a rise in share price already from the news.
Since commencing trading on the TSX Venture Exchange in June 2019, the company has been trading more or less horizontally up until early November 2020, when the stock witnessed an unprecedented rally from $0.53 per share lasting many weeks, allowing the stock to reach new support-resistance levels between $2.10 and $3.00. During this time, the company gained significant attention from Canadian retail investors on Reddit, with a fair mix of structured due diligence posts, as well some less structured “to the moon” posts.
Despite witnessing two instances of pullback since the November rally, surely from satisfied early investors who cashed out to reap their returns, the stock has been a strong pick among both seasoned and newbie investors alike. With the stock being uplisted to the TSX Exchange on Wednesday, the question now becomes: what should current and potential investors in Greenlane Renewables expect for the future?
Well, one perspective is that the TSX uplisting will draw in more attention to an already strong performing equity, and allow the stock to reach new support-resistance levels. With global attention on climate change and renewable energy increasing, Greenlane Renewables might just be perfectly positioned to see exponential growth in the future. After all, a huge catalyst within clean energy right now is Joe Biden’s promise to inject $400 billion into the industry within the next decade.
A more pessimistic opinion is that the stock is already overvalued, and that the uplisting news will have little effect and has already been priced in. Looking at historical charts, it wouldn’t be surprising for some to view Greenlane Renewables as nothing more than a “pump and dump” scheme, similar in context to the recent Wall Street Bets (WSB) fiasco with GME.
What is certain, however, is the longstanding track record Greenlane Renewables presents to investors. As an industry leader, they have supplied over 110 biogas upgrading systems to 18 countries so far. Additionally, they have posted revenues for the first time in 2019, and since then have grown revenue figures by 85%, with consistent growth in quarterly revenues. Demand for its product continues to rise with reported sales order backlogs of $43.8 million.
Recently, they have also signed $3.6 million in new contracts for renewable natural gas projects, indicating to investors of the strong deal flow for the company. From an intrinsic approach, Greenlane Renewables can grow its valuation by taking on more projects, and thereby generating sustainable sources of cash flow that can fund internal business development.
Enough about financials and shareholder sentiment, what about Greenlane Renewables’ management team? From considering its insider ownership of 18%, management is clearly bullish on the prospects of being rewarded by great stock performance, and the large percentage of insider ownership is also a reflection of the alignment of interests between management and shareholders.
Given all we know now, it won’t be surprising to see short term trading trends fluctuate between the same highs and lows again, but as the renewable energy market continues to grow, Greenlane Renewable could be poised to advance itself as an industry leader and significantly grow its current valuation.
Will Greenlane Renewables be a buy for you? Or will you have it on your watchlist? Let us know what you think!
Written by: Benny Fang
