Base Carbon - Accumulate Until Market Wakes UpAnalysis is simple here. This stock seems to be trading thinly, randomly and completely disconnected from its current value and there is no consideration for the long term earnings potential. There is currently zero knowledge or interest in this stock and that provides a unique opportunity to find a very undervalued company. Current book value is roughly $1.2 with most of this value based on a DCF that is conservative using a discount rate of 15% on its primary long term asset.
At some point, someone will discover this value and the stock will the stock will very quickly trade to a new higher value. Given how thinly traded this stock is, this could very well happen in a few trading sessions. When it happens, your guess is as good as mine considering the recent positive news has failed to attract any attention. Regardless of timing, seeing this stock trade up to the Fib 1.618 level seems like a reasonable first move. This level is at $1.37 based on the all time high of $.95 and low of $.265.
Aside from the initial impulsive move that is expected the longer term prospects are interesting. Another project is likely to close before year end and offer similar results as the first project (earnings between $.75 - $1.00). After that, its a matter of if additional projects are completed and the credits generated can be effectively monetized. Its not completely unreasonable to think 2-3 projects per year are possible each earning $.50 to $1. Give it a fair multiple of 3-4x given the nascent (and IMHO somewhat scammy) industry and you have a stock at $2.5. Give it a whacky every ESG fund must own this stock multiple of 30-40x and you have a $25 stock and 50 bagger.
In conclusion, this one is worth buying for the fundamentals. Its worth even more if the market wakes up to that fact. Even better, there's an outside chance of a homerun given its industry, given the possibility it can scale or increase the scope of its activity.
