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Added more on .02s to break .. let’s go!
#Slappityslapslap
Weee going to be an epic morning!
Great article from October 17th, 2017 featuring TVIAQ
Investing in TVIAQ tied to Corbion
Why I Bought Corbion In Order To Continue Investing In The Technology Of TerraVia
Oct.17.17 | About: Corbion NV (CSNVY)
Author: Kevin Quon
Corbion is a leader in its respective field looking for growth opportunities.
TerraVia's assets provide a unique opportunity to expand the company's growth prospects in a complementary manner.
TerraVia's technology platform appears poised to have a much greater chance of success under Corbion's direction.
As a long-term investor in the now bankrupt TerraVia Holdings (OTCPK:TVIAQ), previously known as Solazyme, there should be little reason for my bullishness in the effective demise of the former entity after watching it falter for over 6 years. Yet as one who has only ever been interested by the vast potential of the technology platform Solazyme once held, I find the object of my interest quite far from being played out.
It is not hard to compartmentalize the frustration over my fallen equity in order to recognize the promising opportunity that lies ahead for the technology under its new ownership. With this in mind, I want to press on to explain why Corbion N.V. (OTCPK:CSNVY) has now been added to my Top 20 Investments for my personal portfolio.
On September 29, Corbion effectively announced the completion of its acquisition for substantially all of the assets held by TerraVia Holdings. As a result, Corbion paid a cash purchase price of approximately $20 million to buy the assets of a company whose “operations are currently loss making” but which is also “expected to bring high value creation potential” according to their latest press release.
The acquisition delivers to Corbion TerraVia’s promising heterotrophic microalgae-based technology platform designed to create specialty lipids and proteins, structured fats and tailored oils. The closure of the agreement also brought onboard TerraVia’s intellectual property portfolio, its R&D pipeline, and its ongoing partnerships.
As a refreshing reminder, here are a few key reasons that I remain such a strong proponent for the technology platform that Corbion has purchased:
The platform is capable of producing high-valued tailored oils and fats at scale with a great degree of control and flexibility in regards to the output’s properties and characteristics.
The platform is capable of producing materials that do not exist naturally in the world, but which also offer known benefits favorable to long-term trends now underway in society.
The platform offers a conversion gateway for an abundance of low-valued commodity feedstocks (including waste materials) to become higher-margin products.
The platform utilizes an environmentally favorable method (including a more sustainable carbon footprint, water-use footprint, energy-use footprint, land-use footprint, and etc.) in order to introduce better performing replacement products to existing markets.
The platform is capable of addressing a wide range of sectors and industries with multibillion-dollar markets.
The platform’s outputs can be used as replacements in existing markets, and the platform itself can be adopted by existing infrastructure that has been repurposed.
The platform’s runway for R&D discoveries appears to be quite untapped.
By and large, I remain excited at the prospect of Corbion’s acquisition of TerraVia’s assets. The 100-year-old company has developed a strong operational foundation that revolves around fermentation and actively manages a sustainable supply chain of sourced carbohydrates. The company is based in Europe where sustainability has far greater weight than in America, but operates on a global scale. Above all, Corbion is an existing leader in its primary market of lactic acid, where it has a deeply-rooted foundation in the food industry.
Its entrenchment as a leader has allowed for it to explore other growth industries such as bioplastics, biochemicals, and other bio-based innovations. In 2016, Corbion entered into a partnership with Total S.A. (TOT) to form a bioplastics joint venture. In a previous lifetime, this would have been a much-desired partnership for Solazyme.
In 2016, Corbion generated annual sales of €911.3 and had a workforce of 1,684. The company had manufacturing facilities in the United States, Thailand, Brazil, the Netherlands, and in Spain. Corbion’s EBITDA for 2016 was €170.1 million and its earnings per share was €1.74. Most importantly, its free cash flow was €72.1 million. The company also maintained a conservative net debt/EBITDA ratio of 0.6. Biobased Ingredient sales accounted for 97.6% of its total sales, with Biobased Innovations making up the difference.
What I see in this profile is a company that is looking to expand horizontally in order to spread its influence beyond its primary market. With much of its sales confined to biobased ingredients, Corbion is now beginning to explore high-growth opportunities that are complementary to its existing operation. The technology assets of TerraVia appears to offer that very opportunity. Not only is there diversification in terms of market scope, but also in terms of potential margin profile.
Without much change in supply chain sourcing, TerraVia dramatically expands the ability to address multiple kinds of industries that are often far outside the reaches of a traditional bio-based corporation. Above all, Corbion is well-positioned both in terms of its balance sheet and its influence to patiently develop the microalgae platform while leveraging its own technical fermentation expertise.
Although this might have little bearing on the outcome of the new union, there is one more interesting point to add that comes in the form of a connection. In August 2016, Corbion announced the hiring of Marcel Wubbolts as its Chief Technology Officer. Wubbolts had formerly served as the CTO at Royal DSM (OTCQX:RDSMY) from 2011 to 2016 and in lesser positions for many years prior at the same company. For those who have followed this market space for some time, DSM is well known to be the de-facto leader of microalgae-based fermentation following its $1.1 billion acquisition of Martek Biosciences in 2010.
It goes without saying that seeing TerraVia’s microalgae platform get acquired by the company whose CTO oversaw Martek’s acquisition stands as yet more evidence of the good fit that is likely to commence going forward.
Ultimately, I see the acquisition of TerraVia’s assets as a timely union. Much of the technological innovation and necessary infrastructure has already been achieved and scaled. The hard market development is now underway. TerraVia struggled to emerge as a promising technology solely because of its weak financial hand in light of several management missteps and large macroeconomic shifts. Simply put, TerraVia’s world had changed overnight as oil prices collapsed while management undertook expansion efforts to expedite its development.
Yet out of the ashes of TerraVia, Corbion has freed the technology platform from much of the burden of the former company’s debt. Corbion’s firm operational foundation, global presence, and proven business history stand as a testament to its ability to endure with much greater ease than Solazyme or TerraVia was capable of accomplishing. Corbion has the blessing of time, the business reputation to support the platform, and positive free cash flow to nurture the business into profitability.
For investors, Corbion offers a much more favorable investment opportunity than TerraVia. The company maintains proven profitability in a rather mundane industry revolving around lactic acid. Top-line revenue growth has largely slowed, however, and the company is addressing this as it pursues growth opportunities in bio-based innovations. Despite this, the company has actively returned value to shareholders as it has historically pursued aggressive share buybacks and offered a meaningful dividend. The annual yield of the company currently stands at a respectable 3.34%.
For myself, the overall scope of the company’s business remains a perfect fit in my Top 20 Investment portfolio. As I begin to seek traditionally safer investments in light of what I perceive to be the approaching of a near-term market high, a food-based holding stands well-aligned to provide a greater degree of balance to my technology-heavy portfolio. Corbion offers investors both the relative safety of ingredient-based sales and the growth opportunities found in bio-based technologies. As such, it should serve as an effective balancing tool to provide medium-term growth and safer market sales.
My Top 20 Positions:
As I have shared to my readers in the past who have often found it useful, the following is a current snapshot of my Top 20 Investment portfolio. It serves as an update of the top 20 positions in my portfolio and their respective percentage of my holdings. My last portfolio update was on August 16 in an article found here. The following is detailed as of 10/16/17:
Naspers (OTCPK:NPSND) / Tencent (OTCPK:TCEHY) – 7.37%
Cogint – 7.34%
Biglari Holdings (BH) – 5.68%
International Business Machines (IBM) – 4.51%
NetEase (NTES) – 4.41%
TravelSky Technology (OTCPK:TSYHY) – 4.17%
Retail Food Group [ASX: RFG] – 4.01%
Altaba (AABA) / SoftBank (OTCPK:SFTBY) – 3.87%
Corbion N.V. (OTCPK:CSNVY) - 3.59%
Farmland Partners (FPI) – 3.37%
Alphabet (GOOGL) (NASDAQ:GOOG) – 3.35%
Apple (AAPL) - 3.12%
Reliance Industries [LSX: RIGD] - 3.00%
Microsoft (MSFT) – 2.82%
Amazon (AMZN) - 2.81%
The Walt Disney Company (DIS) – 2.79%
Hannon Armstrong Sustainable Infrastructure (HASI) – 2.73%
Berkshire Hathaway (BRK.B) (NYSE:BRK.A) – 2.73%
HCA Healthcare, Inc. (HCA) - 2.64%
Seaboard Corporation (SEB) - 2.50%
Notes:
Naspers and Tencent are a combined position designed to indirectly and directly capture the momentum of Tencent.
Altaba and SoftBank are a combined position designed to indirectly capture the momentum of Alibaba (BABA).
Retail Food Group and Reliance Industries both trade on exchanges outside of the United States.
The portfolio’s primary objective is to focus on technology and emerging markets in order to capture their growth potential. Additionally, holding companies and stable-income investments are used for balancing stability. I have a stronger tolerance for risk and have integrated positions with very small market caps into my portfolio along with those supporting much larger market caps. Maintaining a balance of risk is a high priority for me. As previously, over the last few months, I have been positioning for a slower growth environment going forward.
Disclosure: I am/we are long CSNVY, TVIAQ, NPSNY, TCEHY, COGT, BH, IBM, NTES, TSYHY, AABA, SFTBY, FPI, GOOGL, AAPL, MSFT, AMZN, DIS, HASI, BRK.B, HCA, SEB.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.
Why would the shares be canceled if lot of big name companies and institutions are invested bigly in here. Typical
Exactly, all pieces of the puzzle for a great run!
EOD predictions going into powerhour??
Weeee indeed
Interesting how people are slowly getting off the ask. Let her run!
Scam! :))
Jk
Wake me up when we break trips, not worried here.
It’s been trading like this for 2 weeks, if SEC wanted to suspend it would’ve done so already. Cmon Gonz you know the game
Lol it’s still morning here in the west coast. :)) Geez play the trade, not marry the news :))
You know when Doog is here, the music just got louder! \m/
Lol nitwit :))
What’s up sly, long time no see bud. BCA* still sleeping, hopefully we have a runner here
Can’t blame the messenger, you would’ve done the same Q
I will keep you updated my friend! And yeah JBizzle didn’t go well as planned. Hoping for this IFXY to fix everyone’s problem
Like a coiled spring ready to break!
You would think the majority of the volume was at 0011 and now we back to square one
100mil volume and at a flat 0%.. lol
Propped bid my friend
A mixture of all, let me rephrase not just news my friend
Like this guy
I wouldn’t be overhyping the news just yet. It might upset people if they don’t get it soon enough and the PPS will suffer. The movement with the price is based on the anticipation of the “news”
That’s right buddy, ready for this battle up!
Cmon you should’ve known this was coming :))
Well behind a MM is a trader with a buy order on the ask or bid. They can easily take it off
Propped bids cmon, you should know this by now
Block chain crypto investor :))
VNDM done, let’s move up
Lol Rallo is a scam.
Simple as that, the writing is on the wall, just have to be patient. Been accumulating since it was back to teens and now look where we are.
Slappage! For the boomage yes!
Pressure will be building, waiting for Monday’s opening bell! Loaded up and secretly accumulating to the nest. This is too easy! Slappity slap!
That’s alright, we got this one solid. What happens when Support breaks, we build it right back up quick and get people out the way you thinking. :))
Didn’t even move
Going to take out that .022
Man this room is poppin! Rocking hard! \m/