The Momentum Letter’s Picks Generate Significant Returns
What do Trillium Gold Mines, Greenlane Renewables, VSBLTY Groupe Technologies, Walker River Resources, Vext Science, and Delic have in common?
If you correctly answered that they are all companies profiled and tracked by The Momentum Letter you should win a prize. Unfortunately, this question is not part of a prize-winning contest. However, if you are not yet a subscriber to our newsletter, it’s not too late to subscribe and become eligible for our monthly $1,000+ subscriber contest.
Even Still, You Might Still Be a Winner
Even though you can’t win a prize for correctly guessing that the above-listed companies are our featured picks, you are still a winner if you invested in any of these companies based on our reporting.
Let’s recap the share price gains and then we’ll provide a snapshot update of each company’s recent activities and news. As of the last full week in February, if you had invested in these companies when we first profiled them, your percentage returns would be:
Greenlane: 490%
VSBLTY: 400%
Delic: 150%
Trillium Gold: 60%
Vext: 25%
Walker River: 22%
Those are some healthy returns percentage-wise, but what do they look like as money? Well, if you had invested $1,000 in each of these companies when we first profiled them, your shares would be worth about this much as of the last full week of February:
Greenlane: $5,915
VSBLTY: $4,999
Delic: $2,499
Trillium Gold: $1,615
Vext: $1,250
Walker River: $1,222
The bigger question, though, is what’s next for these companies.
The Six Bagger
If you picked up some Greenlane Renewables Inc. (TSX:GRN; OTCQX: TGLDF; FRA: 52G) when we first profiled it, you’re sitting on a six-bagger right now. Sure, it might be tempting to sell, but what if the company is just getting started?
The company has been releasing good news and boosting revenues since we first profiled it and there seems to be plenty of momentum for more of the same going forward. This momentum is borne in large part by the increasing demand for renewable natural gas and biogas as greener alternatives for fossil fuels. As a biogas and RNG specialist, Greenlane is well positioned to help keep up with the increasing demand.
On a “show-me-the-money” basis, the company signed CAD$3.6 million contracts in mid-February for biogas projects in the Midwest U.S. and in Brazil. This follows a CAD$10 million biogas upgrade contract signed in December and pushes total contract amounts over the past 14 months past the CAD$50 million mark.
Little doubt the company will sign more deals in the months ahead, given that it is currently competing for almost CAD$700 million in combined contract work. In anticipation of an increased workload, Greenlane recently completed bought deal financing that raised CAD$26 million that the company will primarily use to fund new projects.
In addition to new contracts, Greenlane keeps reporting new record quarterly revenues. For the third quarter of 2020 the company recorded record revenues of CAD$6.5 million, a 30% year-over-year increase. We imagine that the fourth quarter will also prove record-breaking, as gross margins have been successively climbing and the company sits on a CAD$43 million sales order backlog, money that will continue to enter the revenue stream in the quarters ahead.
Last, the company this month upped its public exposure with an uplisting from the TSX Venture exchange to the senior TSX big board.
The Five-Bagger
Similar to Greenlane, VSBLTY Groupe Technologies (CSE: VSBY; OTC: VSBGF), has been signing deals. In fact, since we first profiled the company last June, VSBLTY has signed 15 deals and/or partnerships.
A “computer vision” SaaS company, VSBLTY develops security and marketing solutions through artificial intelligence- and machine learning- powered video cameras and digital displays. Company management describes 2020 as an inflection point and believes that 2021 will prove to be a breakout year, with a targeted US$15-million to $20 million in SaaS bookings. This would definitely mark an improvement over 2020.
The company has acknowledged that it needs to boost gross margins by significantly reducing operational and data management expenses. If management can combine this with more deal making it would help the current share price and open it up for further increases. Fortunately, VSBLTY’s management team is comprised of technology field all-stars. This was a major factor behind our initial bullish stance and represents significant brain fuel that can power the company’s continued growth.
Remember, they’re monetizing an entirely new medium here.
The Two-and-a-Half-Bagger
Delic Corp. (CSE: DELC, OCQB: DELCF) is the youngest company of the bunch, but it’s the one we are most excited about with regard to further upside. In short, we think this company has a solid business plan, stellar management team, and is perfectly positioned to capitalize on the nascent psychedelics sector. And if the psychedelics sector takes off this decade like the marijuana sector did in the last decade, Delic’s share price could easily climb into the double digits.
For an in-depth assessment of our sentiments about Delic, we recommend that you refer to our recent article: “Delic Corp. Ramping Up Psychedelics Revenue.” We continue to stand behind everything stated in that article. Not only will Delic’s business plan make it the most well-known brand in psychedelics, but the brand itself will be a powerful generator of revenues.
Fresh out of the IPO gate as of mid-November, Delic’s management is already working on ramping those revenues up. As noted in the above article, the company recently announced acquisition intention of two cash-flow positive psychedelic wellness centers. Combined with the company’s fast-growing media arm, Delic has already laid the groundwork for achieving its goal of becoming the most recognized name in psycheDELICs.
Another key for Delic’s future success also continues to turn. Like marijuana, psychedelics need to continue evolving out of fringe status into mainstream acceptance. This is happening. Last year, Oregon and Washington, DC approved measures that allow for the therapeutic use of psilocybin. California legislators are expected to soon consider a bill that would decriminalize personal use of psychedelics. Other states and local jurisdictions may also debate decriminalization and therapeutic use measures in the coming year.
Sound familiar?
Well, like marijuana last decade, such moves could gain momentum in the coming few years. And Delic will be perfectly positioned to capitalize on it.
Still Drilling While Serving as a Potential Hedge
While investors haven’t hit the mother lode (yet), share price gains for Trillium Gold Mines Inc. (TSX.V: TGM; OTC: CNRMF) since we first profiled the company are certainly respectable. And that mother lode potential remains in play as the company is currently in “drill, baby, drill” mode at three different sites.
Recently released 2020 drill results from the company’s flagship Newman Todd structure delivered high grade and visible gold that will help guide ongoing exploration at the site. Among the results were 16.1 g/t gold over 3.9 metres, 124.66 g/t gold over .24 metres, and 49.56 g/t gold over 0.3 metres. The company is still assessing results from four other drill holes and is also actively drilling on its Rivard and Gold Centre properties.
Trillium also serves as a good potential hedge during these fraught times. If the world goes to a proverbial “hell in a handbasket” as your grandmother might have said, the price of gold would inevitably rise. The share price of small explorers and producers such as Trillium would almost certainly follow.
Cannabis Sector Will Make Another Move Up
Companies in the cannabis sector got busted in the past two years, but we have no doubt that the sector will recover and boom again. Marijuana is not going away and the market for legal medical and recreational marijuana is soaring faster than a bong hit pulled from a TokeMaster.
With this in mind, Vext Science (CNX: VEXT; OTCQX: VEXTF) remains our favorite microcap in the sector. As noted in our initial January 5th profile, we are impressed by the company’s brand, business plan, and stellar management. Going forward we believe the company will generate significant earnings growth over the coming months and years, which will in turn propel the share price.
Speaking of share price, our 25% return is based on that January 5th date. Had you bought shares in mid-November you would be sitting on gains of about 180%.
And, Yes, More Gold!
With only a 22% gain since first profiled in The Momentum Letter, Walker River Resources Corp. (TSX-V: WRR; OCTQB: WRRZF) is yet to make a significant move.
Similar to Trillium, Walker River is in drill mode and serves as a potential hedge. And like Trillium, we have faith in the management’s prospecting skills. The company has completed drilling on 10 of 60 holes planned for its Lapon Gold site. Assay results from those first 10 holes are expected to be released soon. Meanwhile, the company has resumed drilling at the Lapon Gold site and is conducting pre-drilling exploration at its Pikes Peak and Rattlesnake sites.
OK, You’re Updated—What’s Next?
We trust that some of you made out well by investing in our picks. You can thank us by sharing your success—and our feature stories—on Facebook, Twitter, Telegram, and Reddit. Also, please encourage others to subscribe to our newsletter. And stay tuned, as we’ll continue to bring you news about profiled microcap companies and add some new ones to the mix.
