There's a Good Reason Why I'm Circling Back to Vision Marine

I didn't trust yesterday, but honestly, I don't hate today. The selloff from the early half of the day has found some support. We're grinding our way higher. Of course, things would likely be much worse without Amazon , but beggars can't be choosers. I received a couple of questions on my mention of Vision Marine and why I like it, so I thought I'd do a quick circle back to the name. Maybe I have an unfair advantage here since I was able to sit down with management in Miami, FL a few weeks ago. This is one of those company stories where I think if the stock hasn't tripled or been bought out with a significant premium in the next 24 months. I should be forced to print out the article and eat the paper (don't eat paper, kids). Some folks will give it the moniker, The Tesla of boats, but I actually think that understates the company. Why? Because of the company's a cash cow rental business. Just last month, VMAR reported income of $4.33 million from their boat rental facility in Newport Beach, CA. That means they are on pace to crush current estimates and expectations. This business, mainly focused on pontoon rentals in the recreational boating space, has the ability to expand into multiple cities over the next few years. In fact, after talking with management, I believe there is a real possibility VMAR is cash flow positive before the end of 2022. Add in cash of roughly $11 million against no debt, and you realize how cheap this company is both by market cap and enterprise value. As oil continues to rise, more attention will come toward VMAR's crown jewel - its e180 electric outboard motor system. With the strong rental business, VMAR can internally develop its electric outboard motors. These are aimed at taking market share from ICE (internal combustion engines) powertrains. The company has a manufacturing deal in place with McLaren Engineering, owned by behemoth Linamar . Additionally, Octillion will be producing VMAR's specially designed electric battery system. Spend five or 10 minutes with CTO Xavier Montagne and you'll never look at the EV market the same way. His knowledge combined with CEO Alex Mongeon's experience and passion around the boating industry and you'll quickly realize VMAR is three to four years ahead of any new competitor entering the space. There isn't anything on the market to compete with a 180-horsepower electric engine, so I would expect OEMs to come calling quickly. It will cost boaters about $5 in electricity to fully charge a setup that will give them around 50 nautical miles of distance or four to five hours. These numbers can vary based on how a boat is driven, of course. On the technical side, the stock has enjoyed a big run since the middle of January. We might be creating an inverse head and shoulders (bullish) pattern. If that's the case, we can expect shares to bottom out in the $5.76 to $6.00 range and trade sideways for a few weeks. That's my targeted entry currently. The alternative entry is a push above $7. If that occurs on a weekly close, then our new target becomes $10 per share based on the current price action. The aforementioned targeted entry also aligns with the 21-week simple moving average (SMA). Seeing the 10-week SMA rising is a big positive here as well. If the market gives me the gift of buying at $6 or below, I'll grab it with both hands. Otherwise, I'll be scaling in until we break above $7, then I'll push harder. I would expect the company to consider raising capital in the $12 to $15 range so they can expand more quickly, but that's still a double or more from current levels, so I'd be okay with that. And if it doesn't happen, then no worries. (Amazon is a holding in the Action Alerts PLUS member club. Want to be alerted before AAP buys or sells AMZN? Learn more now.)

There's a Good Reason Why I'm Circling Back to Vision Marine

As oil continues to rise, more attention will come toward VMAR's crown jewel - its e180 electric outboard motor system.

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