Contributed Opinion

BioLargo Inc. (BLGO:OTCQB) is a cleantech company that, over the course of many years, has developed a broad range of products, solutions, and technologies that are now beginning to make serious inroads into the marketplace, so that, even though the company has in the past had to battle serious "cash burn" and cost issues that necessitated stock dilution, it is now winning through with revenues growing rapidly as sales accelerate dramatically.

BioLargo supports four subsidiaries that develop and commercialize cleantech products and specialty services. BioLargo holds the intellectual property for each technology and product. These four subsidiaries are:

• ONM Environmental Products and Services, whose flagship product CupriDyne Clean, eliminates odors in an environmentally friendly way — and that's eliminate, not mask. A derivative product, the Pooph pet odor control product, is hugely popular with consumers.
• BioLargo Engineering Science and Tech, whose flagship product, the Aqueous Electrostatic Concentrator (AEC), eliminates FFAS (polyfluoroalkyl substances) from contaminated water in a cost and energy-efficient manner.
• BioLargo Water, whose flagship product, the Advanced Oxidation System (AOS), confers exceptional disinfection performance of water with concurrent decontamination. This technology affords lower costs than competitors and is modular, flexible, and scalable with ultra-low energy consumption.
• BioLargo Energy Technologies, whose flagship product is the Sodium – Sulphur Long Duration Energy Storage (LDES) Battery Technology, has the potential to revolutionize the industry for reasons that become clear when you look at its features. This battery technology is safer as it eliminates runaway fire risk and is longer lasting, more energy dense, and more efficient than existing technologies and it does not require the use of Rare Earth Metals that are threatened with supply shortages. This commercial-ready no-maintenance design is ideal for long-duration storage, offloading renewable energy, EV charging stations, and commercial or residential charging stations.

In addition, there is a medical technologies subsidiary, Clyra Medical Technologies Inc. that has developed advanced wound care products.

The key point for investors to grasp is that these subsidiaries of BioLargo represent years of developmental work and investment by the company that is now being brought to fruition with market-ready products and services that are being rolled out and gaining widespread acclaim and uptake, which is why the company's revenues are taking off higher in the way that they have been, with a lot of "blue sky" potential in many cases, a notable example being the new battery technologies.

Now, we will proceed to look at the stock charts for Biolargo.

Starting with the long-term 20-year arithmetic chart for BioLargo, we see that the company has been "at it" for a long time. The reason that the stock has made no net progress during the life of this chart is simple — the company has been burdened with high developmental costs for its broad range of products and services, and this necessitated stock dilution to keep going but as we have discussed these are now perfected or close to being perfected and being rolled out and gaining wide acceptance and interest in the marketplace resulting in robust sales and revenue growth.

A major bullmarket in the stock is therefore expected, and it looks like it just started this January. A very important point worth observing on this chart is that even though the price hasn't moved much yet, comparatively speaking, there are strong technical indications that a major bullmarket has been incubating for a long time, which is the persistent heavy volume since early 2019 that indicates a healthy rotation of stock to newer buyers who will not be inclined to sell until they have turned a good profit, and the steep rise in the Accumulation line since 2021 which shows that there has been persistent "Smart Money" buying of the stock.

Zooming in via the 20-month log chart, we see a breakout into a strong first upleg by BioLargo just last month following the completion of a lengthy 3-wave A-B-C correction.

This breakout had been presaged for a long time by the positive divergence of the Accumulation line, which had been trending higher for many months and now its even stronger. The momentum trend (MACD), which had been neutral for almost a year, is now up.

The stock is still rather overbought after last month's sharp rally, so the question now is whether we will see something of a reaction before it resumes the upward path.

The first point to make regarding what the stock does next is a fundamental one, which is that the prospects for the company's businesses are now so bright that any near-term reaction — if there is one — is likely to be minor.

The company is posting big revenue gains quarter after quarter, and on the fifth of this month, there was the big news that Jeffrey Kightlinger, a recognized water industry leader who is renowned for his distinguished service as the longest-serving CEO of the Metropolitan Water District of Southern California, the nation's largest municipal water provider serving over 19 million Californians, has Joined the Board of BioLargo's Water Equipment and PFAS Solutions Company.

With these positive factors in mind, we will now proceed to look at the 6-month chart.

On the 6-month log chart, we can see the strong runup last month that took the price way above its 200-day moving average with the result that this average has now turned up, and we have already seen a bullish cross of the moving averages, which traditionally marks the start of a new bullmarket.

After this strong move, it is obviously somewhat overbought on a short-term basis, which raises the question of whether it will soon react back, ordinarily made more likely by the number of shares in issue. The answer is thought to be no because of the pace at which the company's revenues and prospects are improving, and technically, on the chart, it looks like a small bull Flag is forming that will soon lead to another upleg of similar magnitude to the first — so the minor shakeout a few days back looks like all the reaction we are going to see — and even if it does break lower temporarily, it should quickly flip back to the upside.

The conclusion is that BioLargo is a solid long-term investment with a lot more upside than many might expect, and if, as suspected, it is indeed marking out a bull Flag, then it is even a Buy for shorter-term traders whilst it remains within the confines of the Flag. 

On the long-term chart, we can see that if it really gets moving, it could get as high as $1.00 - $1.10 over a one to two-year timeframe, and while this may seem improbable given the number of shares in issue, the rapid growth prospects for the company's various businesses bring this well within the realms of possibility.

BioLargo Inc. closed at US$0.216 on February 6, 2024.