NXT Energy Solutions (SFD.V) has been one of the hottest stocks in the TSX-Venture in 2015. Shares of SFD have doubled during the first half of this year and show few signs of stopping anytime soon:
Technically speaking the stock broke out in February and has steadily marched higher while exhibiting signs of institutional accumulation (high volume trend up days). Both of the recent pullbacks (April and May) found textbook support at the rising 50-day simple moving average (SMA), another sign of a stock under accumulation. The $2.50 level has offered some short-term resistance, however, a breakout above this level will likely trigger a quick move to $3+. Meanwhile, short term support comes in near the $2.20 level with the rising 50-day SMA just below.
Perhaps most impressive is the fact that SFD shares have shrugged off a fairly challenging market environment for oil related equities. It seems that the challenging crude oil price environment is actually a net positive for SFD’s cutting edge technology as oil producers seek to cut the costs of finding new oil reserves. SFD has a relatively tight share count with 44.7 million common shares outstanding and a fully diluted share count of 55.8 million shares. In addition, an impressive 36% of the fully diluted share count is held by directors and management of the company.
NXT Energy Solutions has developed a patent pending gravity-based instrument called Stress Field Detection (SFD®). This revolutionary new technology detects gravitational perturbations which arise due to the physical contrast of density and stress conditions between geologic discontinuities and non-anomalous or “background” geological conditions. From the company’s website:
“Presently, SFD® is the only method capable of providing information on changes in subsurface homogeneity relating to fluid entrapment. These changes are influenced by rock types and rock properties in a sedimentary basin (e.g., porosity and permeability) and factors such as fluid accumulation and significant stress variations within entrapped reservoirs.”
From NXT Energy Solutions 6/10/2015 corporate presentation:
The fundamentals are compelling, the company has no debt and has already signed over $15 million in contracts year-to-date. From my vantage point, more important is the chart demonstrates that market participants continue to accumulate SFD shares which are in scarce supply due to the tight share structure and sizable insider ownership. Given what we have witnessed in similar situations with company’s that have a cutting edge technology which is in high demand and a tight share count, it would not be unthinkable to see SFD shares eventually reach double-digits. We have a long term target of $5/share on SFD and would not become concerned unless we saw a weekly close below the $2.00 level.
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This is not investment advice. All facts are to be checked and verified by reader. As always please do your own due diligence.
This article contains forward-looking statements that are based on NXT Energy Solutions current expectations and estimates. Forward-looking statements are frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “suggest”, “indicate” and other similar words or statements that certain events or conditions “may” or “will” occur. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from estimated or anticipated events or results implied or expressed in such forward-looking statements. Such factors include, among others: the actual results of current exploration activities; conclusions of economic evaluations; changes in project parameters as plans to continue to be refined; possible variations in ore grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing; and fluctuations in metal prices. There may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, NXT Energy Solutions disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.