Small Cap Strategist is published by Crystal Equity Research an independent research resource on small capitalization stocks. Follow along as we discuss the most recent trends in the small-cap sector, investigate interesting companies and pan a few not-so-promising stocks.
of the most recent additions to our Beach Boys Index is Verdezyne, Inc. (private), a
developer of alternative industrial chemicals.The company is at an early stage, having no products near commercial stage
not to mention no revenue.Nonetheless,
Verdezyne has achieved quite a bit of visibility.In April this year, the company took in $48
million in new capital.What a closing
party they had!President Obama came by
to witness the signing.
has developed a platform for the fermentation of yeast strains that can be used
in the production of bio-based chemicals.The company’s scientists chose yeast over bacteria popular with other
biofuel developers because yeast is a hardier more stable host.The yeast can be used with a variety of
feedstocks, a feature that gives the company options to reduce production
costs-if Verdezyne ever gets to commercial stage.
products include dodecanedioic acid, sebacic acid and adipic acid, all three of
which are vital to common products we can all find in our homes and offices.The foremost is used mostly in
antiseptics.China produces most of the
world’s sebacic acid, which is used in plasticizers,
lubricants, hydraulic fluids, cosmetics and candles, among other products.Adipic acid is used in the production of
is no trade at the end of this article.Verdezyne is a private company.Even qualified investors may be too late to the party to get a position
in Verdezyne.In my view, it is
worthwhile to track alternative chemicals developers.I believe they are more likely to produce
profits than the biofuel products who are using similar technologies.At least they may produce profits at an
earlier stage than biofuel producers.Furthermore, alternative fuels producers are more likely to become acquisition
targets of established industrial chemicals companies.These deals could have a positive impact on
valuation multiples for the larger, established chemicals producers.
Neither the author
of the Small
Cap Strategist web log, Crystal Equity
Research nor its affiliates have a beneficial interest in the companies