“Blah, blah, blah, blah.”
An angry teenager with a large platform openly mocking world leaders for doing nothing but “blah, blah, blah” for climate change shows how badly we’ve genuinely screwed up.(2) We have seriously gotten to this point.
Climate change isn’t what it once was. Singing Kumbaya about “building back better” won’t fix a thing.
Action is needed now. In 2021 alone, we saw powerful storms, wildfires, heat waves, and other extreme climate-related events. According to a recent Washington Post analysis, nearly a third of Americans live in a county struck by a weather disaster this past summer. Around two-thirds also live in places that experienced a multi day heatwave.(3)
In the wake of Hurricane Ida, the current U.S. administration warned that such weather events could cost U.S. taxpayers more than $100 billion in 2021. “We know what’s causing climate change – human activity…This is no longer subject to debate.”(4)
But what about the rest of the world? That price tag doesn’t even include the catastrophic flooding, cyclones, dust storms, wildfires, and more that we saw all across Europe and Asia.
It’s also why we’ve seen some of the largest companies in the world adopt lofty carbon neutrality and climate commitments and become entirely powered by green energy.(7) The buzz behind companies with substantial environmental, social, and governance (ESG) characteristics has also reached a fever pitch.(1)
Who do you think it’s spearheading this journey towards net neutrality and sustainability, though? It’s not EVs, even though they get all the hype. In actuality, it’s companies using green technology to make our businesses and buildings more energy efficient.
We’ve seen certain companies that focus on helping buildings “go green” skyrocket over the last year with colossal investor interest. Take LXB Industries, for example.
LXB Industries is a chemical and GHP manufacturer and a stakeholder in green building practices. Around a third of its revenue comes from climate control technologies to improve buildings’ energy efficiency while reducing carbon emissions.(8)
On Oct 06, 2020, its stock was trading at only $1.53. Before the market opened nearly a year later, on Oct 5, 2021, it had moved 740.52% towards an all-time high of roughly $12.86.(9)
We’ve seen some other sustainable building plays pop in the last year too.
- Johnson Controls International ran 89.29% from an Oct 28, 2020 low of $40.42 to a Sep 10, 2021 high of $76.51.(10)
- Honeywell International Inc ran 48.6% from an Oct 28, 2020 low of $159.39 to an Aug 02, 2021 high of $236.86.(11)
- Brookfield Infrastructure Partners ran 42.05% from an Oct 28, 2020 low of $41.24 to a Sep 13, 2021 high of $58.58.(12)
- PFB Corporation ran from 83.98% from an Oct 07, 2020 low of CAD $14.67 to a Jul 28, 2021 high of CAD $26.99.(13)
But here’s the deal. NONE of these companies are doing what this company we uncovered is doing. We are ESG bulls to the core, but when we came across Crown Electrokinetics (NASDAQ:CRKN), we were stunned. There are many stocks in the market today that claim to make buildings more sustainable. Yet much of it is “blah, blah, blah.” Crown could very well follow LXB Industries’ footsteps as the next hot sustainable building play to break out. And it may have already started with a 68.22% rally between Aug 19, 2021, and Sep 30, 2021.(15).
This company has all the ingredients you want in an under-the-radar ESG play. It has an intellectual property (IP) portfolio acquired from HP for smart window technology and more. It also has a massive addressable market, performance and manufacturing advantages, and so much more to love.(14)
Not to mention, as of Oct 5, 2021, it could have a potential twelve months upside (analyst target) of 176.4% (22) and net income growth that could average 154.0% over the next five fiscal years.(23)
So with everything this company has to offer and “going green” a long-term trend, learn why this could genuinely be the start of something special for Crown Electrokinetics (NASDAQ:CRKN).
Reason #1: ESG Investing: A Lucrative Way Forward
The future is now when it comes to environmental, social, and governance (ESG) investing. No longer is the institutional investment landscape completely ignoring the effect companies have on the environment or their business practices. We’re at the point now where many institutional investors are actually pressuring companies to improve their ESG characteristics- or else.
According to SquareWell Partners, the top 50 asset managers, with $60 trillion in assets, are developing rating systems and publishing research and voting policies on environmental, social, and governance issues. Of the 50 managers included in the study, all but one, Charles Schwab Investment Management, have signed onto the United Nations Principles for Responsible Investment.(16)
“ESG investing can no longer be regarded as a nice-to-have or a niche matter,” said SquareWell Partners. “It has moved squarely into the mainstream, and is growing not just in equity markets, but in private markets and fixed income too.”(16)
Investment manager Natixis also reports that ESG investments took in a record $152 billion to reach $1.6 trillion in total assets last year. In addition, asset managers launched a record number of ESG products: 196.(17)
The percentage of institutional investors that implement ESG approaches as “an integral part of sound investing” also rose by 18% from 2019 to 2021. The number of fund selectors using ESG strategies additionally rose from 65% to 77% over three years.(17)
Natixis says one of the reasons ESG approaches are growing is that regulators are pressuring asset owners and asset managers to enact more sustainability measures. Investor demand for ESG investments is also rising.(17)
Bloomberg takes it a step further with a focus on the long-term. They claim ESG assets could hit $53 trillion of assets under management (AUM) by 2025, representing more than a third of the $140.5 trillion of the world’s projected total AUM.(1)
Moreover, we could see a massive amount of inflows in ESG ETFs. ESG ETF assets could surpass $190 billion by year-end and account for almost 13% of global ETF asset growth. Within the next 5 years, this figure could soar past $1 trillion.(1)
Needless to say, with all this money pouring into the sector, it’s pretty easy to make a bullish case for Crown Electrokinetics (NASDAQ:CRKN) and what it’s doing.
Reason #2: A Massive Addressable Market
Let’s first break down Crown’s product offering and then go through why this market could be so massive and lucrative for them.
Crown’s first product is called the DynamicTint Smart Glass Insert. This product is one of the most, if not the most, technologically advanced “smart glass” inserts in the world today. The insert is based on the company’s electrokinetic technology – a pigment-based thin-film initially developed by HP.(14)
To put it lightly, Crown has the world at its fingertips with this product. The practice of green building is soaring in popularity. Construction companies across the United States have had no choice but to evolve from outdated methods. Under the pressures of environmental regulations and public attention, they’ve had no other choice but to adopt practices that reduce carbon emissions, eliminate waste, and improve sustainability.(8)
Today, the new construction smart glass market in the U.S. is worth roughly $3.8B and is estimated to grow to $6.8B by 2025.(14)
Beyond this, the company could have a generational opportunity by targeting retrofit opportunities in commercial/residential and automotive markets. There are 5.6 million existing commercial buildings in the U.S. representing approximately 87 billion rentable square feet potentially ripe for the picking with the DynamicTint Smart Glass Insert.(14) Especially when you consider that DynamicTint Inserts for existing windows converting single pane to dual pane. There is no other smart glass technology that can serve this market.(14)
The fact that it has a real estate partner and current investor with an existing portfolio of approximately 110 buildings certainly puts the company on the right track.(14)
There are several large-scale potential catalysts for this product too. There’s a $1 trillion infrastructure proposal that, according to the U.S. Green Building Council, could “make green buildings even more accessible to governments, companies, and individuals,” and “create around 650,000 jobs, according to an estimate by Mark Zandi, chief economist at Moody’s Analytics, including in fields such as manufacturing, renewable energy, engineering, design, and construction.”(17)
There’s also a $3.5 trillion spending package on the table that includes aggressive measures to combat climate change, including “proposed funding for energy-efficient building weatherization.”(18)
With some of the largest companies in the world making lofty carbon neutrality and climate commitments, Crown Electrokinetics (NASDAQ:CRKN) could potentially see these names knocking on its door very shortly too:(7)
- Cities are responsible for over 70% of global energy consumption and CO2 emissions, mainly from buildings.
- Achieving ZERO aims to have no building CO2 emissions by 2040.
- California’s target is to reduce GHG emissions by 40% by 2030 and 80% by 2050.
- New York commits to achieving carbon neutrality by 2050, requiring buildings to reduce emissions by 40% by 2030 or be subject to fines.
Should we go on? We could truly go day long with this. There is such a vast addressable market and long-term demand for Crown Electrokinetics (NASDAQ:CRKN). However, we have even more compelling reasons why this company could be the next explosive ESG play.
Reason #3: Performance and Manufacturing Advantages and a Competitive Edge
- Affordable- Roll-to-Roll (R2R) manufacturing, inexpensive materials, and lower operating energy costs. DynamicTint is manufactured through a dual-step process using industry-standard R2R processing equipment. Because production capabilities already exist in-house, it’s less expensive than alternative methods, materials/components are ubiquitous and inexpensive, and the lower cost expands the addressable market.
- Low Energy Requirements- Low voltage and can be powered by solar strip, battery, or existing electrical infrastructure.
- Retrofit- Insert application eliminates the need to replace single-pane windows with dual pane windows.
- Speed- Transition time is typically under ~2 seconds.
- Color Neutral- Pigment is designed to be color neutral and will not affect the hue of what is viewed through the window in the dark or tinted state.
- Sustainable- Reducing waste, reducing energy consumption, and using renewable energy.
The transformative technology behind DynamicTint is the foundation of all of this, making it so unique.(14)
- Clear PET Substrates – Same material as window tinting films.
- Transparent Conductor on PET – Indium Tin Oxide (ITO) – same as most touch screens.
- Electronic Ink – Nanoparticles suspended in a fluid that absorb light.
- Nanoparticles are controlled through DC low voltage applied to the ITO conductor material.
Should it really come as a surprise why Crown Electrokinetics (NASDAQ:CRKN) and DynamicTint could have competitive advantages light years ahead of the market?
Reason #4: It Has Intellectual Property From HP and Patents Too
Time for a history lesson.
In 2007, Hewlett Packard Labs (HP) began developing EK technology. If you don’t know about HP, get familiar because this company has long been one of the bluebloods for innovation, development, and product success.
In 2015, HP Lab divested EK technology to Crown. Off the bat, there was $30M invested, a Functional R&D lab, a strong IP portfolio, and a rockstar team of engineers.
Now, we’re here in 2021. In February, Crown officially acquired the intellectual property (IP) portfolio from HP. It also has 10 patents and 7 applications under its belt, with very likely more to come. The IP covers pigment, resin, and ICA, and patents and trade secrets include global markets preventing competitors from making, using, or selling EK technology.(14)
Reason #5: A Stock That’s Charged Higher Thanks to Recent News
Helping the bullish case for the CRKN stock is the way it’s performed since mid-August. After touching a low of $2.58 on Aug 19, 2021, the stock promptly moved roughly 68.22% to its Sep 30, 2021 peak of $4.34.(15)
What certainly helps the case for the stock is recent news from Sep 28. The company announced its first commercial agreement with a proptech-focused real estate holding company, MetroSpaces. Under the terms of the arrangement, approximately 450 Smart Window Inserts powered by DynamicTint are to be installed in a 70,000 sq-ft Houston, Texas office building.(24)
”Achieving this milestone with MetroSpaces paves the way for our larger prospective customers to follow this path. We look forward to a successful first installation and long-term customer relationship to rollout in additional MetroSpaces buildings,” said Doug Croxall, Chairman & CEO of Crown.(24)
With a Current Ratio of 14.7x(19) and a Quick Ratio of 14.4x(20) as of Oct 5, 2021, you have what looks like a very solidly run company. It very likely has more than enough short-term assets to offset any liabilities, and with a balance sheet holding more cash than debt.
As of Oct 5, 2021, the stock had a float of 12.01M, 15.71% of shares held by insiders, and 9.88% held by institutions. Based on these figures, the stock’s explosive break-out potential on any inkling of good news looks even more tantalizing.(21)
Lastly, consider some of this data from Finbox. As of Oct 5, 2021, CRKN had a potential twelve-month upside (analyst target) of 176.4%(22) and net income growth that could average 154.0% over the next five fiscal years.(23)
All of This Poses a Key Takeaway Question:
Can You Do Better Than Crown Electrokinetics (NASDAQ:CRKN) As the Top, Potentially Explosive ESG Play?
Look, nothing in life is a certainty. That is, besides our planet boiling alive unless drastic action is taken.
ESG investing could be the wave of the future, and helping buildings go green could be one of the most lucrative ways for that to happen. We’ve seen Crown Electrokinetics (NASDAQ:CRKN) go on a tear since mid-August. Could it just be the beginning?
Companies like Crown that could transform our entire commercial building landscape green are at the forefront of the sustainability revolution combating climate change. It’s not just a fad for 2021. It’s something to look at for the next decade-plus as we scramble to find solutions to solve this climate crisis.
No longer is wealth creation and environmental conservation mutually exclusive. Both are now interconnected in so many ways. Crown is a company with all the ingredients you’re looking for in this space to potentially accomplish both.