In today's column I will highlight more presentations from the LD Micro Conference that I attended this week in Los Angeles.
It can be difficult to divine macro themes from micro(cap) company presentations, but the zeitgeist was captured perfectly during a presentation by Biotricity's (BTCY) CEO Waqaas al-Siddiq. As Waqaas was taking questions following his formal presentation, a questioner asked Waqaas about his exit strategy for BTCY. That's a very valid question, and one that should be asked of early-stage companies.
In this case, however, the questioner threw out a couple of example "target valuations" for BTCY in the high-nine-figure range (BTCY has a current market valuation of $140 million.) Waqaas, quite literally a former Boy Genius, simply raised his hand and firmly, but politely, said his only exit strategy would come with a valuation of "billion, with a 'b'. I am an entrepreneur. If I don't believe that is achievable... I should find another job."
That was it. In a nutshell. Waqaas captured the spirit of Microcap investing in one quote. Every public company CEO claims to have entrepreneurial spirit, but Waqaas and the hundred or so other CEOs at LD Micro actually live it. It is an extremely risky pursuit, but the rewards are multiple of the returns that one could ever expect from investing in (SPY) or (QQQ) .
Biotricity's remote health monitoring system is a very interesting story owing to its cloud-based, real-time interactivity and BTCY has been growing at a quarter-over-rate that most large-cap companies would envy on an annual rate. I will cover Biotricity in full in a future RM column.
For the sake of time today, though, I will just run through interesting presentations in bullet-point format. I started yesterday with Acme United (ACU) and Arcturus Therapeutics (ARCT) , so after Biotricity, the next names, in alphabetical order, that grabbed my attention at LD were the following:
Geodrill (GDLLF) . LD requires mental flexibility, above all else. It is entirely possible that the most interesting presentations come from companies in incredibly different industries. In a sea of emerging tech stories, Geodrill does exactly what it's name implies. It drills the earth. Based in Ghana, the company mainly supplies and equipment for gold mining operations in West Africa's Gold Coast. But CEO Dave Harper noted that Geodrill is a mineral driller, not just a gold driller. The company has opened operations in Peru, where its equipment is being used to drill for copper and has been used to drill for zinc.
My ears perked up when Dave mentioned an application that Geodrill's equipment was being used for by a newer customer: spodumene. That's hard-rock lithium. As the world's auto OEMs rush to transition to electric vehicles, lithium-ion batteries are red-hot, as are prices for the lithium products used within them, especially lithium carbonate. The typical bulk production of lithium from brines, or salares, mainly located in South America, is currently viewed as environmentally unfriendly, owing to run-off issues and water consumption. But a world of electrified powertrains will require multiples of current production of lithium. I think Geodrill is incredibly well-positioned to supply equipment for drilling of old-fashioned precious metals, and the 21st Century version of precious metals, as well.
To give smaller companies exposure to investors in a market that is, statistically, more dominated by a handful of large names than ever before, is why I go to LD Micro. It is why Chris Lahiji and his team made the monumental effort to host a conference during a pandemic.
Vicinity Motor (VEV) . My most rewarding experience of late was hosting a Fireside Chat between Will Trainer, CEO Of Vicinity Motor, and Sue Ozdemir, CEO of Exro Technologies (EXROF) . They discussed the supply agreement between the two companies that will see Vicinity validate Exro's coil driver inverter technology for use on Vicinity's upcoming line of EV buses, the Lightning. You can view it here.
I was pleased to hear John LaGourgue, Vicinity's corporate development director, present at LD. Electrifying the powertrains in Vicinity's core 30-foot bus (with Exro's help) with the Lightning is the sizzle in the Vicinity story, but VEV has so much more.
One attractive opportunity I saw from John's presentation was to electrify the medium-duty truck market through Vicinity's cab-over product offer. These municipal and small business owners would be replacing current ICE vehicles - John mentioned the Ford (F) F450 as a good comparable - with electrified powertrains and the demand, and government subsidy, is quite strong in this segment. VEV has calculated the total opportunity there at 430k units annually, and for a company that will deliver about 130 buses this year (supply chain issues have knocked VEV back a bit in 2021, as with every OEM) as that market opportunity is enormous.
But I didn't even get a chance to mention the coffee-sourcing and marketing prowess of Farmer Brothers (FARM) , whose CEO Deverl Maserang and CFO Scott Drake I talked to at length, the wild stock price performance - yet very steady business performance, including its recent acquisition of currency sectors firm Nanotech - of Metamaterials, a name I have covered (from a fundamental, not "meme stonk" perspective) in my RM column previously, or even BrainChip (BRCHF) , a truly innovative Aussie/U.S. stock hybrid, whose management I had the opportunity to chat with at length at LD.
So many interesting stories... so little column space. These companies exist... even if the media ignores them. I don't. And I won't. Always remember that smaller stocks require bigger due diligence, so keep your questions coming to me via RM channels.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider many of these stocks to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.
