This is a micro-cap stock that has barely any sell-side broker coverage, and its core business in providing friction reduction for oil and gas companies in the US will be a big winner given Trump is very pro-oil and gas. However, where we see material value that is under-appreciated by the market is their technology which can treat hazardous man-made chemicals known as Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS).
PFAS are being recognised as potentially as dangerous as asbestos, and in the US they have passed legislation to mandate that by 2029 the level of PFAS in drinking water has to be reduced dramatically. That will create a US$250 billion market opportunity to test and remediate the issues of drinking water in the US alone.
At the moment, SciDev’s water treatment technology is 25 per cent of the business, but in my view, it'll be more than half the business in four years’ time. This is a business I think can grow to many times larger than its current size.
How well do narratives help inform your perspective?
Disclaimer
The user Bigchase holds no position in ASX:SDV. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.