Ahead of the Press Release: Catalyst Realized
A project that consumed cash for years is now generating cash, but the market still appears to be assigning it negative value.
An asset under development by one of my largest holdings, which I first wrote about in From Money Pit to Money Maker, just reached an important inflection point. For the last several years, this asset had been consuming cash - but it will now start generating cash flow.
The company publicly disclosed the milestone in its latest investor presentation, but it hasn’t formally press released it out of abundant conservatism, while waiting for the asset to fully ramp up.
The situation reminds me of Baytex BTE 0.00%↑ in 2021, which was another small oil producer at the time. Baytex disclosed a major oil discovery in a monthly public disclosure to the local regulator, but didn’t formally announce it in a press release. The market appeared to overlook the development, so I bought a lot of stock Baytex and wrote an article highlighting the opportunity. Baytex’s stock subsequently increased by more than 300% over the following year, helped by the company’s later formal announcement of the discovery:
I believe a similar disconnect is playing out with this company. In this article, I’ll explain what’s changed, why the asset could become much more valuable, and why I’ve been adding to my stock position here.
Disclaimer: This is for informational and educational purposes only. This is not an offer, solicitation, or investment recommendation. I own shares and/or related securities of companies mentioned and may buy or sell them at any time. Please consult an advisor and do your own diligence. Investments incur risk of loss. Past performance is not indicative of future results.
