Hello Gators and everyone else! I’ve got some exciting research done on a unique and upcoming company and had to share it with all of you!
Today I’m going to start sharing some fundamental and financial data with you about Cielo Waste Solutions – CWSFF.
CWSFF is an OTC ticker currently unless you are able to access the Canadian Stock Exchange. There you can find it under the ticker CMC. It is a Canadian carbon-neutral green diesel company that turns plastic and other landfill waste into diesel. This is a 2 problem / 1 solution approach to business that is, in my opinion, genius!
CWSFF is currently trading at $0.74.
Check out the video below from the CWS homepage
1 Solution for 2 Problems . . .
Plastics. Imagine a world without this miracle substance. When you woke up this morning, you probably used a toothbrush made out of plastic to brush your teeth. You probably opened a refrigerator that is lined with plastic to get a plastic milk jug as a drink of choice to compliment the cereal breakfast you poured out of a plastic bag. You might have even used a plastic spoon and bowl so that you did not have to wash dishes first thing this morning.
Modern humans are obsessed with the substance. I am typing on a keyboard that is made of plastic. This stuff literally encompasses every part of our daily lives. Our obsession with disposable plastic has had great ecological consequences. These consequences are hidden from us through waste management programs that include shipping the problem overseas to poverty stricken nations so that our obsession becomes their problem to deal with and they mismanage it poorly.
Additionally, these same nations that are obsessed with plastic are also obsessed with travel. Whether it be a vacation across country or a commute to work, people from countries in North America, Europe, and Asia are always on the move by bus, plane, train, ship, or automobile.
Terms like unsustainable, peak oil, climate change, acidification, toxicity, etc have become commonly used in conversations from kitchen tables and living rooms to the highest levels of government in the most powerful nations on the planet.
Sad, isn’t it?
What if there was a solution that killed two birds with one stone and offered us renewable carbon neutral energy, clean waters and smaller landfills, breathable air and good soil? Sounds too good to be true, right? Cielo doesn’t think so. In fact, they’re taking the bull by the horns and trying to do exactly that.
Let’s have a look at some of the problems. While reading below, please keep in mind that the focus of many governments worldwide and a concern of many people is a cleaner environment and renewable energy. This alone is a catalyst that could drive the business.
Also keep in mind that I am famously skeptical of the electronic vehicle craze. We’ll talk about that in another post. Spoiler alert for that post: I personally believe that green fuels offer promises that EV companies can make, but never adequately fulfill.
Let’s dive right into the fundamentals of this promising little gem knowns as Cielo Waste Solutions:
The floating problem – Plastic waste in the oceans . . .
Have you ever dreamed of that Hawaii vacation? Maybe you’ve taken one in the past or maybe, like me, you’ve never been and would like to see what all the fuss is about. The largest collection of floating plastic waste in the world is accumulating between California and Hawaii and it is not getting smaller. Currently, the Great Pacific Garbage Patch is 1.6 million kilometers in size. This is twice the size of Texas.
No country has taken responsibility for the waste and none have committed serious resources to cleaning it up to my knowledge.
According to Our World in Data mankind is producing 381 million tons of plastic per year as of 2015 and approximately 8 million tons of plastic trash is finding its way into our oceans per year!
- 79,000 tons of plastic is floating in the Pacific Ocean alone
- It is believed that there are 46,000 pieces of plastic in every square mile of ocean Source: Plastic Statistics – Ocean Crusaders
- Plastic pollution is leading to acidification of the oceans
- 200 dead zones have been identified where organisms can no longer live
- It takes 20-1,000 years for a plastic bag to break up. Few actually break down and those that break down release toxic chemicals into the oceans and water supplies.
At least we won’t have to buy plastic beach toys for our kids to play on the beach.
Beaches aren’t the only problem . . .
According to the EPA, the United States alone produces 265 million tons of municipal landfill waste per year. This is an incredible number to consider. The EPA estimates that 70% of this waste is made up of paper and cardboard, food scraps, plastic, rubber, and latex. The remaining 30% or so would be made up of metals, glass, and other miscellaneous wastes. We’ll come back to these numbers in a bit. Source : Landfills in the United States – Wikipedia
According to The Guardian the United States (and other modern, developed countries) have been shipping millions of tons of plastic garbage to poor, developing countries. This is not a solution to a problem. It’s simply hiding the problem from our own people.
These poorer countries lack the infrastructure and environmental regulations to manage this sort of waste and this contributes to our ocean problem that was discussed earlier.
Not just a trash problem . . .
- 37% of US energy consumption involves fossil fuels
- Transportation accounts for 28% of US energy consumption.
- The US uses 47.2 billion gallons of diesel per year (2019)
- In 2019 the EIA estimated that diesel exhaust contributed 456 million tons of CO2. This is 24% of the transportation sector and 9% of the United States total CO2 output
Rise of Blue Skies . . .
Bio diesels and other green diesel alternatives are nothing new. In fact, the first diesel engine was designed to run on vegetable oil and later on, peanut oil. While these two substances aren’t exactly eco-friendly, the petroleum based substitute to diesel as we know it has been around since the invention of the diesel engine itself.
Whether by regulation or by necessity, green fuel companies are popping up. Some are focusing their efforts on refining old, used oil into a diesel alternative and others are turning organic biomass into fuel.
Cielo is one such company rising in this emerging sector of creating carbon neutral fuels to power the shipping and transportation industry. Cielo, literally meaning ‘Blue Skies,’ has come up with a process to turn landfill waste (plastics, rubber, latex, ogranic and biodegradable matter) into diesel with a carbon neural foot print. That type of garbage amounts to roughly what composes 70% of our landfills currently.
So far, we’ve been talking about plastic pollution being predominantly one of the greatest polluters on the planet. No matter where you stand on the climate change debate, you cannot argue that the plastic waste has gotten out of control. With plastic waste making up a whopping 12% of the municipal waste in the United States, its an outstanding problem and requires an outstanding solution.
An outstanding solution to the problem would be to turn the trash into fuel. That’s exactly what Cielo has begun doing. Cielo’s vision of the future is reducing landfill waste to produce carbon neutral diesel. This is a business plan that is bipartisan and makes sense like few things do in a deeply politically divided world.
Growing supply of trash is a good thing (for Cielo) . . .
The global waste to energy is expected to meet or exceed $44 billion by 2024 and Cielo has a good chance of capturing a significant piece of those funds. With limited competition, partnerships and relationships with railroads and municipalities already in place, and a business model that targets rapid expansion, Cielo might just the a hidden diamond in a crowded field of green energy stocks.
Unlike fossil fuel supplies that will likely impact the oil giants sooner rather than later, Cielo isn’t likely to see any shortage in feed stock for their materials anytime in the near future with 2.01 billion tons of waste created in 2018 and an expected 3.4 billion tons of waste expected to be produced annually by 2050. Unlike oil reserves, Cielo’s feedstock is growing.
Another key difference between Cielo and the oil giants is that the giants have to rely on expensive, unsightly drilling rigs that have become a political flashpoint between rival parties in just about every country on the planet.
Can you imagine politicians having one less thing to argue about? Maybe our governments could spend that time working on something productive like food shortages, public health and safety, and affordable health care that people can actually afford. I doubt it would be that revolutionary but one can dream.
Cielo would actually be reducing the piles of trash that plague every local municipality in North America. Decreased landfill use is not a political flash point. It is common sense. Turning trash into diesel will likely draw political support from both sides of the isle, providing they can all stop eating crayons long enough to realize how revolutionary this can be.
Would it end drilling and fossil fuel use as we know it? No. Probably not. But this can disrupt the oil industry in exciting ways for investors.
Political support for renewable diesels growing in Canada . . .
Currently the Canadian government requires that 2% of all diesel sold in Canada be made with renewable sources. Cielo is in almost in a league of their own here. With limited domestic competition and growing demand from an increasingly environmentally public, Cielo is well positioned to be the dominant player in this sector in Canada.
Most renewable diesels, particularly the ones that make trash into diesel, involve complicated processes, high heat, and intense pressures. These facilities are composed of heavy machinery and expensive equipment. Cielo’s process is smaller, less heat intensive, and is more efficient than the competition. This could facilitate a rapid expansion of facilities and production capabilities in Canada and beyond.
Cielo looks well positioned to take advantage of an aggressive and streamlined expansion of their company. At the time of this article Cielo had one small test facility capable of producing 2,000 liters per hour online with several facilities and larger capacities already in the pipeline for construction in the near future. The company has plans for 40 facilities total by 2025.
This fast and aggressive pace will likely lead to market dominance for Cielo in the renewable diesel sector for Canada.
And Canada is not the only country that they are targeting.
A move into the United States is widely speculated and the company has gone through the process of securing patents in both the US and Canada.
Also noteworthy on the political field is the appointment of the Honorable Peter MacKay, former House of Parliament member among other prestigious titles. It can easily be assumed that Mr. MacKay’s contacts and experience in the political arena will prove valuable to Cielo sooner rather than later. Even if that is not the case, Mr. MacKay’s professional career as a speaker and lawyer brings weight and authority.
In addition to Mr. MacKay joining the Cielo team, the Canadian Government has also committed 15 billion to decarbonization. Canada is aggressively pursuing green energy and is intent on becoming a world leader on green policies and renewable resources.
Cielo’s Other Product . . .
We’ve talked about turning trash into renewable diesel so far. That is an outstanding achievement in its own right. The land based transportation industry is another begging for renewable fuel. Aviation.
The aviation industry has been rapidly expanding ever since the Kitty Hawk made its legendary flight in 1903. From military use to civilian vacationers, aviation has taken the world by storm in ways unimaginable only a few generations ago.
Every day there are approximately 45,000 flights shuttling 2.9 million people around the globe. The fuel, commonly known as jet fuel, is actually a form of kerosene and is a product that Cielo is able to manufacture with their process.
Cielo is poised to be able to dominate in this area as well. Airlines are begging for renewable, lower cost fuels to avoid punishing regulation by governments worldwide. Cielo may be in the right place at the right time with the right product and business model.
In 2019 approximately 73 million gallons of jet fuel was consumed each day. To say that there is sufficient demand for jet fuel to accommodate a new, Canadian renewable fuel source is an understatement.
Facilities . . .
Cielo is currently doing their testing and first production out of their Aldersyde facility. The facility is capable of producing approximately 16.4 million liters per year. This is the smallest of the planned facilities and more are coming online soon.
The Dunmore and Grand Prairie facilities should be online by Q4 2022 and should have increased production capacity. All three facilities should be able to crank out at least 131 million liters per year. There are 8 other known facilities planned or expected and the company is pushing complete 40 facilities in the next 5 years.
Each facility lands Cielo a 3.5 million dollar management fee. That is cash in hand once the facility is complete. Between the carbon credits it will receive from the Canadian government, government grants for research, and actual sales beginning as soon as 6 weeks from current date, Cielo looks to be a very tempting company and ripe for investment. This management fee will allow Cielo the ability to add instant equity into their facilities, fund operational expenses, or increase expansion if they so choose.
Financials . . .
Currently, Cielo has no debt. The company cleared the warrants and has no need for additional financing at shareholder expense. Management has stated that they do not wish to increase the float and it appears as though dilution will not be an issue.
The company will be raising capital through other means, primarily sales, in a few weeks. That, along with government funding, carbon credits, and the 3.5 million management fee per facility, operational and R&D costs should be more than covered.
Some estimates put the Aldersyde facility alone at an estimated $14 million in gross profits once the expansion to the facility is completed around Q1 2022. The larger facilities, funded by JV, will generate significantly larger profits once they are paid off. Payoff is anticipated quickly for each facility due to the low operational costs and high profit margin per liter of product.
Ceilo is operating with a 639 million share float currently and potentially has 115 million shares on the shelf. As previously stated, management has expressed that they are not looking to raise more funds through issuance of shares. Having the option to do so gives the company flexibility and is not necessarily a bad thing.
With the potential for each of these facilities to make at least 14 million gross profit annually and the company’s aggressive plan to strive for 40 operating facilities within 5 years, Cielo should be lucrative to investors with a great earnings per share. Assuming that each facility hits the target of at least 14 million gross profits per year then Cielo should be earning approximately 560 million per year within 5 years.
Doing the math, that’s a $0.87 EPS based on the capabilities of the smallest facility once all 40 sites are completed and operational. All of the new facilities will be larger than Aldersyde and will be able to produce significantly higher volumes of produc.
This means that the EPS number that I just provided is on the extreme low end. To say that Cielo is financially undervalued according to its potential within a few years is an understatement, to say the least.
It is also important to realize that as gross profits increase, the need for third party funding decreases. This paves the way for rapid expansion as each facility is an exponential increase in profitability. Cielo assets could absolutely explode given the fact that, once the red tape and permitting is out of the way, a facility can be built between approximately 6 months and one year (estimated.)
More information can be found at Financial Statements – Cielo Waste Solutions Corp. (cielows.com)
Technical Analysis . . .
Weekly Chart :
There is not a ton of chart data available for CWSFF for the monthly chart to be very useful. Looking at the weekly, however, is a simple exercise for the current setup.
CWSFF is trading in a range between critical support at $0.52 and critical resistance at $0.99. It is trading above the 13 week moving average. This is a bullish setup and can possibly confirm a bull flag that appears to be forming on the weekly chart.
The RSI is at a 67, which is in a bullish territory without getting the common (but sometimes false) accusation of being ‘overbought’ by retail traders. Overall, the movement looks healthy and the 13 week simple moving average should act as a solid dynamic support. If, for whatever reason that fails to hold, expect $0.52 to act as critical support to the current arrangement. Remember, these are weekly candles so we are talking about closing prices, not mid week prices.
To date, that support has not been tested with a direct hit. The range, however, has and it has proven to be a good area of support.
Volume sees trading around 1 million shares daily on average, give or take. This is a small percentage of the float changing hands and real volume could bring tremendous price action. This is not what I would call a low float stock with 600+ million shares out there, but it isn’t extremely high either. Great news could easily run the float in a day.
A bull flag pattern might confirm with surging volume and closing prices above $0.99. A price target for this pattern would be $2.05 per share or a 106% gainer from current prices. This could confirm and begin the ascent in as little as two weeks or as many as perhaps 6.
With the investors expecting a flurry of PR activity around June, this looks like it could be a pattern that confirms and easily hits the price target. That’s when current investors are expecting to see the first sales of the renewable fuels. I do not expect $2.05 to be the ceiling for this stock.
Expectations . . .
It would be foolish to assume that the current share value of CWSFF is fair based upon a bullish setup on the weekly chart currently, the rapid expansion plans of Cielo, the need for renewable diesel and reduction of landfill waste, current and projected financials, and the political agendas of North American countries.
In my humble opinion, it is highly undervalued from a fundamental, financial, and technical perspective.
I personally am beyond impressed with what I’ve learned so far and I have just scratched the surface. Also, I’m not much of a financial analyst and I can see the value in the numbers.
This is a growing, in demand sector with a product that solves two of the world’s largest pollution problems : green house gasses such as CO2 and methane as well as plastic and other landfill waste pollution.
Beyond a likely significant increase of share value, Cielo should be a welcome addition to the business landscape. Not only does this offer a major step in controlling humanity’s unsustainable ability to create trash and waste, but it will offer a fuel that is carbon neutral and reduces methane gas produced at landfills.
Clean air, clean water, clean fuel. (They should use that as a motto).
If Cielo hits its goals and keeps its promises to investors, I personally do not see any reason why this stock should be trading lower than $5.00 – $8.00 per share within 2 years and could potentially be higher than that.
This is one of the few tickers out there that is rising when other small cap companies are getting slaughtered and it seems to be trying to gain momentum regardless of a bearish investing environment.
In addition to solid charts and fundamentals, CWSFF is seeking to uplist to TSX Venture or TSX. This would allow large institutional investors the ability to add this to their pension plans and other long term investment strategies for their clients. It would also become much more available to shareholders in the US, since many cannot access OTC or Canadian stocks.
A larger exposure to potentially bullish investors means volume and, in this case, volume likely means surging prices.
An uplisting could occur in as little as 30 – 60 days, if not sooner.
Long term, this could easily be a $30 – $40 stock with stable financials and a rock solid business plan.
Lack of competition in Canada from domestic companies means that Cielo could see national and international partnerships and contracts popping up frequently.
In short, I see incredible value and low risk here. I like it.
Conclusion . . .
Cielo means “Blue Skies” in Greek. The name is fitting not only from its environmentally friendly business model and products, but also in terms of what share holders can expect in their financial futures.
An attractive and in demand array of products along with government support, financial stability, and early partnerships make this an easy buy, whether you purchase it from the OTC as CWSFF or from CSE as CMC.
The company’s only real risk at this point is proving whether or not they can achieve low sulfur content in their roadway diesel during continuous flow. It’s critical to note that they’ve proven the ability in a batch process at their Aldersyde facility already.
That’s not much of a risk, if you ask me.
Diesel does not have to have a low sulfur content to be sold on the market. It’s only a ‘big deal’ for roadway diesel. There are plenty of applications for off-road diesel in heavy transportation, agriculture, and industrial uses. No matter what the sulfur content is, the product can be sold and used.
Shareholders should expect a significant and rapid rise in share price over the next 1-3 years if Cielo manages to keep all of its promises of expansion, production, and profitability. To date, they have not had any known credibility issues that I know of and their track record with communicating accomplishments is impressive.
Gator Traders does not give investment advice, but I will happily tell you that I am bullish and now long on this company and adding to my position with technically advantageous movements in price.
Thank you for your attention and making it this far. I’m sure you are one of the few who survived a read this long. They will one day build statues in your honor for your commitment to your portfolio.
What are your thoughts of Cielo? Let me know in the comment section and please leave me a like. I typed a lot to get you to click that little heart. I promise it’s painless!
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Gator Traders LLC