Bisset Microcap Fund Talks on GLE
stockformation.com
Chris - "Another stock that we own is Global ThermoElectric [GLE.TO] which we have been with for a number of years. When we first bought the stock, the company had military contracts for heaters that were designed for telecommunications units in remote areas. The stock was about $1 and had earnings of about $0.07, so it had good fundamentals. But it also had a platform that they were working on for solid oxide fuel cells. While their core business was doing well with some major US contracts, they had a breakthrough in their technology and the stock went from about $1 last January to about $26. So again it comes back to finding small companies early on that have the potential to become really big companies. Global announced last week that they are trying to enter the home electricity generation market which is enormous, especially when you remember that electricity in Europe is three times as expensive as it is in North America. So if they can get the economics right, home electricity generation has a massive potential market. This really underscores what we are looking for in the Microcap Fund - small companies with reasonable valuations which really have the potential to become world class companies."
Stockformation.com - Does this "baby Ballard" have competition in the home market?
Chris - "Plug Power [PLUG] in the US which has gone from $26 to about $120 in the last couple of months is a form of competition. But these are different technologies. You use the term "baby Ballard" but they are using different fuel cell technology to that which is being used by Global. Ballard [BLD.TO] is really focussing on automobile propulsion systems, given their relationships with Ford and Daimler Chrysler. Global's products are not necessarily for the propulsion of automobiles, they are more for auxiliary power. The Global technology is for the generation of electricity not necessarily for propulsion. If you look at Global's cell technologies, they are far less complex than the proton exchange membranes that Ballard are using. Given that home electricity generation is so economically sensitive, Global's technology will have an economic viability whereas I don't think that Ballard cells have that type of viability in the home generation market. I mentioned Plug Power, who are really using a variation of Ballard's technology. So although there are different people going after the home market, I believe Global's technology is more economically viable. They have a prototype that works, now they have to work on the economics of it working on size and production volumes etc. They are going after a global market that could be huge."
Stockformation.com - Bearing in mind the enormity of the potential market, where can you see the stock going?
Gene - "Let's put it this way ; Ballard has a market cap of about $6 billion, Global's is about $0.5 billion. In terms of the relative values out there, this stock is just starting to hit the radar screen of institutional investors. Their technology is for real. We don't know exactly what the end result will be, but Global is certainly a "good horse to back". There's lots of upside. There are about three or four competitors in the space in terms similar of market cap. These companies will get funding also, so it will just accelerate the adoption of this technology in terms of making it economically viable for the market and Global should be a beneficiary of that." |
