Money Manager Still Optimistic for 2024

AlphaNorth Asset Management is a Toronto-based investment manager that was founded in 2007. The firm believes that superior long-term equity returns can be achieved by taking advantage of inefficiencies in the Canadian small-cap stock universe through careful security selection on both a long and short basis.

AlphaNorth combines technical analysis with both bottom-up and top-down strategies when selecting investments that offer the best reward versus risk opportunities. The firm utilizes various technical analysis techniques that have proven successful to assist in determining the timing of buy/sell decisions. Fundamental analysis, including management meetings, is also routinely employed during AlphaNorth's security selection process.

With such a long history, we here at Streetwise thought it would be wise to sit down with the president and CEO of AlphaNorth, Steve Palmer, to go over what stocks he will be looking at in the new year. 

Palmer has been in the industry since 1995, where he has been given many awards as a top portfolio manager. According to AlphaNorth's website, "Prior to founding AlphaNorth in 2007, Steve was the vice president of Canadian Equities for nine years at one of the world's largest financial institutions. The small-cap fund returned 35.8% annualized during his tenure, ranking it as the #1 fund across several time periods by a major fund ranking service."

Char Technologies

The first company we spoke about was Char Technologies (YES:TSX). Char Technologies is a clean technology company that specializes in high-temperature pyrolysis — a process that uses heat to decompose organic materials. Palmer noted he had been involved with Char for a few years now and made a point of noting the past prosperity and popularity of clean-tech companies.

"Clean-tech was quite hot a while back," he said. However, "everything has taken a beating in the last little while when the junior resource space, including clean-tech. Yet, I continue to like them as it's one of the best that has been validated."

This validation comes from the Canadian government, which has given them around CA$13 million in funding, a plant already in operation, and a recent deal with a major steel company, ArcelorMittal SA.

Palmer noted of this deal, "It is the largest steel company in the world. And presumably, if they're [ArcelorMittal SA] going to fund the company, they're going to use their technology and products and then roll it out throughout all their steel mills, which would be a huge opportunity."

Reuters reports that 16.45% of Char Technologies is held by management and insiders. CEO Andrew White has 6%, with 5.02 million shares, and Director James Sbrolla has 5.49%, with 4.59 million.

13.16% is with strategic investor ArcelorMittal SA.

The rest is with retail investors.

Market Watch notes that Char has a market cap of CA$41.38 million and 88.14 million shares outstanding. It trades in the 52-week range between CA$0.27 and CA$0.82.

Collective Mining Ltd.

Next, Palmer touched on Collective Mining Ltd. (CNL:TSXV). Collective Mining is a Canadian copper, silver, and gold exploration company that focuses on projects within Caldas, Columbia. Palmer first became involved with the company as one of his partners was a major shareholder and was later impressed by Collective's saged management team.

He commented, "It's an experienced, successful team that's done it before. And the results they've been getting have been really good." He pointed out Collective's long intercepts of great grades, saying, "I think they are on to something very big." 

While the current gold price has weighed on the company, Palmer actually sees it as an opportunity for Collective. 

"I think once the gold price breaks through US$2000, it will be a catalyst for the  space. The macro has not been great for the sector, but they have been getting very good results," he said, so they should see great successes once that gold price rises. 

According to Reuters, 38.18% of the company is held by management and insiders. Executive Chairman of the Board Ari Sussman owns 17.89%, with 10.85 million shares. Independent Director Ashwath Mehra owns 2.17%, with 1.32 million, and CFO Paul Begin owns 1.87%, with 1.14 million.

Institutions own 8.09%. Two major shareholders in this category include, 1832 Asset Management LP owns 3.69%, with 2.24 million shares, and Sprott Asset Management LP owns 2.92%, with 1.77 million.

The rest is with retail.

Market Watch reports that Collective Mining has a market cap of CA$216.3 million and 54.53 million shares outstanding. It trades in the 52-week range between CA$3.75 and CA$6.45

Volt Lithium

Next, Palmer recommended Volt Lithium Corp. (VLT:TSV;VLTLF:US), a company that we have heavily covered here at Streetwise. Volt is a Canadian lithium development and technology company. It has the goal of being North America's first commercial producer of lithium hydroxide and lithium carbonate from oilfield brine, a new way of extracting lithium. 

Palmer commented that he was impressed by Volt's methods of lithium extraction, stating, "It's a company that has technology that can extract lithium from oil and gas wells. There are many companies that have to deal with the water associated with the production; they have to do something with it, process it, and then put it back into the ground. These guys can actually take that which is normally a waste cost stream for energy companies and extract lithium out of it."

He noted that because of this technology, Volt has been in discussions with several major producers and partners. Palmer has hope that something will materialize from that within the next several months.

"Once they have a partner, they can move pretty quickly into production," he said. 

We also discussed the current stock price, which is down from a CA$0.50 high earlier this year. Palmer believed that one reason for this dip was that the company needed to raise money. This led to short-term players becoming involved in Volt. However, even in light of this, Palmer noted, "If they were to do a partnership, I think the stock could easily get back to its previous high." So, now may be a time to get into the company while the stock price remains low.

Headquartered in Calgary, Alberta, Volt Lithium Corp. has a market cap of CA $26 million. It has 130,303,604 shares, 33,739,180 warrants, and 7,765,000 options.  

The company currently has CA$4.5 million in the bank and a monthly burn rate of CA$100,000. It trades at a 52-week range of CA$0.13 and CA$0.55. 

According to the company, management and insiders own 16.65% of the company.

James Alexander Wylie owns 8.74% of the company with 11.38 million shares, Martin Scase owns 4.97% with 6.44 million shares, Warner Uhl owns 0.88% with 1.15 million shares, Morgan Tiernan owns 0.39% with 0.50 million shares, Maury Dumba owns 0.49% with 0.64 million shares, and Kyle Robert Hookey owns 1.180% with 1.54 million shares.

9% is with institutional investors.

The rest is with retail.

According to Market Watch, Volt has a market cap of CA$29.4 million and 127.84 million shares outstanding. It trades in the 52-week range between CA$0.07 and CA$0.55

Byrna Technologies

Last but not least, Palmer introduced Byrna Technologies (BYRN:NASDAQ), a technology company with a mission to provide civilians, law enforcement, and security workers with safe non-lethal alternatives to firearms. Their goal is to create products that allow those in need to defend themselves and navigate dangerous situations without costing lives. Byrna has a current line of "less-lethal" pistols which use compressed air (CO2) to stop an attacker in their tracks.

While Palmer noted the company has a small hiccup earlier this year in terms of marketing, they have now moved forward with full force, including celebrity endorsement. Recently, Sean Hannity endorsed a plethora of the company's products.

"As a result, the web traffic is higher than it was before they had this problem," Palmer said. Last quarter, Byrna reported US$7.2 million in revenue. Palmer believes the company now has the potential to double that this quarter, which will end November 30. 

"That may be a good catalyst for the stock," Palmer noted, "and I'm pretty excited going forward because there is a huge market for that product. It makes a lot of sense." Palmer mentioned the prevalence of shootings in the United States as well as calls to limit police brutality, and he likes to support a company that not only has growth potential but one that can help people.

Reuters notes that 18.02% of the company is held by management and insiders. Pierre F. Lapeyre, Jr. owns the most out of this category at 13.26%, with 2.89 million shares.

2.18% is with strategic investor Northest Industrial Partners LLC, with 0.48 million. 

25.08% is with institutions. ArrowMark Colorado Holdings LLC has 7.33%, with 1.61 million. The Vangaurd Group Inc. has 3.53%, with 0.78 million, and FNY Investment Advisors LLC has 3.41%, wth 0.56 million. 

The rest is with retail investors. 

According to Market Watch, Byrna has a market cap of US$127.47 million and 21.98 million shares outstanding. It trades in the 52-week range between US$2.19 and US$10.38.

A Positive Note 

We finished our conversation on a lighter note. While a lot of people in the market have filled the rhetoric with doom and gloom, Palmer has a different view. 

"I am generally excited about the market because it is cyclical," he said. "The Canadian junior market goes from one extreme to the other. The market's most recent high was in early 2021. Since that time it's been almost three years now. We've been in a downturn in which the TSX Venture index has declined by 54%. The Canadian stock exchange has gone down 87%. Sentiment is extremely bad. I always say that the Canadian Junior market never really goes sideways for very long. It's either going straight up or straight down. And I think we're due for a turn here, and I'm pretty sure the next direction is up. I am quite optimistic about 2024."

Palmer made a point to note that he has been positive on equities in general over the past year, and that has shown to be the right call. S&P 500 and NASDAQ have performed well. The TSXV has not and lagged behind, but Palmer commented, "I believe that's going to turn."

Important Disclosures:

1. Volt Lithium Corp. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000. 
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Volt Lithium Corp. and  Char Technologies Ltd., 
3.  Katherine DeGilio wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
4. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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