2 Speculative Stock Plays From Canada That Might Interest Investors – Thermal Energy Int’l & Railpower
Submitted by EnergyTechStocks.com
Energy efficiency is coming in all shapes and sizes, from plug-in electric cars that all-but-eliminate gasoline to light emitting diode (LED) lights that use a fraction of the electricity used by incandescent bulbs. At this point, however, some companies that possibly could turn out to be winners are still purely speculative plays, and that goes for two Canadian firms in particular.
The first is Ottawa-based Thermal Energy International Inc., which trades on the TSX Venture Exchange. Thermal Energy has technology for capturing waste heat so that it can be-reused by a manufacturer. This solves two problems at once, reducing a manufacturer’s energy costs and its greenhouse gas emissions (GHG).
A recent private placement by Thermal Energy was oversubscribed and resulted in $15 million being raised, proceeds going toward the acquisition of a British company that makes steam traps, some of which Thermal Energy uses in its heat recapture system. The company said the acquisition will open up new sales and market opportunities to go along with its recent $20 million, eight-year deal with a Northeastern U.S. pulp and paper mill. The paper mill deal reportedly is expected to enable the mill to save $40 million in fuel costs over the eight-year period.
The company, which has a partnership deal with Johnson Controls, reportedly is targeting a number of manufacturing industries including food and beverage, petrochemicals and biofuels. The company reportedly hopes to accelerate sales through a shared savings arrangement where clients basically pay Thermal Energy a percentage of the savings from Thermal’s installed equipment.
In May the company reported a 370% jump in sales for its fiscal third quarter ended in February, to a little over $500,000; however, its net loss also rose, by 9%, to nearly $570,000, reflecting overhead costs the company said it was seeking to control. The company said its third quarter results did not include $1.65 million in energy conservation work being done at a paper mill in Canada. Those results are to be included in its next quarterly report.
The second is North Vancouver-based Railpower Technologies Corp., which trades on the Toronto exchange. Railpower rebuilds railroad locomotives, turning out energy-efficient hybrid engines.
The company has been on the ropes, but things appear to be looking up, thanks to major cash injections from the Ontario Teachers’ Pension Plan, plus a recent thumb’s up from five California shortline operators that tested Railpower equipment in their yards and on the road. The company thinks that, now that the locomotives have tested well, high oil prices will lure rail operators into placing orders to replace rapidly-aging fleets.
According to Railpower, those recent tests performed by its customers “clearly demonstrated that in certain circumstances our locomotives can pull almost twice as many railcars than the conventional locomotives they are replacing,” while reducing fuel consumption up to 45%. One customer who tested it reportedly found that a Railpower locomotive did the work of three GE 600 horsepower locomotives, with a fuel saving of over 40%, and a reduction of more than 80% in particulates and nitrogen oxide emissions.
The company most recently reported a first quarter loss of $7.6 million compared with a loss of $8.4 million a year earlier.
