Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<div><div><div><div><ul style="list-style-type: disc;"><li><p>Bringing the NDAA to bear. The US Congress, specifically the House of Representatives’ Armed Services Committee, directed the US Department of Defense to explore and assess the domestic ability to process undersea polymetallic nodules in the United States for the purpose of establishing a critical materials supply chain independent of China.</p></li><li><p>Auspicious timing. The timing of the request is notable, as it comes after several nations, including China, Norway, and Japan, began to move forward with deep-sea mineral extraction projects in their sovereign waters, now that the technology for collecting and transporting to the surface the polymetallic nodules found on the seabed is maturing and the July meeting of the ISA is about to get underway.</p></li><li><p>Not a member, but... While the US is not a signatory (member) of the ISA, it is an observer and, as such, has the ability to positively contribute to the conversation and weigh in on matters pertaining to the development and issuance of the final exploitation regulations for deep-sea mining in international waters. </p><div><div><div><div></div></div></div></div></li></ul></div></div></div></div>

Bringing the NDAA to bear. The US Congress, specifically the House of Representatives’ Armed Services Committee, directed the US Department of Defense to explore and assess the domestic ability to process undersea polymetallic nodules in the United States for the purpose of establishing a critical materials supply chain independent of China.Auspicious timing. The timing of the request is notable, as it comes after several nations, including China, Norway, and Japan, began to move forward with deep-sea mineral extraction projects in their sovereign waters, now that the technology for collecting and transporting to the surface the polymetallic nodules found on the seabed is maturing and the July meeting of the ISA is about to get underway.Not a member, but... While the US is not a signatory (member) of the ISA, it is an observer and, as such, has the ability to positively contribute to the conversation and weigh in on matters pertaining to the development and issuance of the final exploitation regulations for deep-sea mining in international waters. 

TMC the Metals Company, Inc. - US Congress Weighs In on Deep-Sea Nodule Collection

<ul><li>Maersk exit completed. The Danish shipping company, which had a significant equity position in TMC’s early days as a public entity, has completed the sale of its stake, removing a major hurdle to TMC’s ability to sustain upward price momentum as positive developments continue to improve the story’s fundamentals.</li><li>Strong selling pressure removed. Maersk’s stake in TMC was considered non-core as its services contract with TMC ended in 2021, and the company began selling its nearly 21 million share position late last year and has recently completed the liquidation process.</li><li>The entirety of the final 4 million share position was purchased by TMC’s largest shareholder, ERAS Capital.</li></ul>

Maersk exit completed. The Danish shipping company, which had a significant equity position in TMC’s early days as a public entity, has completed the sale of its stake, removing a major hurdle to TMC’s ability to sustain upward price momentum as positive developments continue to improve the story’s fundamentals.Strong selling pressure removed. Maersk’s stake in TMC was considered non-core as its services contract with TMC ended in 2021, and the company began selling its nearly 21 million share position late last year and has recently completed the liquidation process.The entirety of the final 4 million share position was purchased by TMC’s largest shareholder, ERAS Capital.

Tmc the Metals Company, Inc.  - As Headwinds Abate, Fundamentals Re-Emerge

Thematic (Sector/Industry)

<ul>
<li>WTR Sustainable Index: During the week ended June 9, 2023, the WTR Sustainable Index outperformed the broader market, rising 9.7% W/W versus the S&amp;P 500 Index (up 0.4%), the Russell 2000 Index (up 1.9%), and the Nasdaq Composite Index (up 0.1%).</li>
<li>Advanced Transportation Solutions (73.6% of the index) drove the index’s performance, rising 12.8%, while Energy Technology (6.8% of the index) was up 2.1% and Industrial Climate and Ag Technology was up 2.5%.</li>
<li>Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 25.0x versus 20.0x for the S&amp;P 500.</li>
</ul>


WTR Sustainable Index: During the week ended June 9, 2023, the WTR Sustainable Index outperformed the broader market, rising 9.7% W/W versus the S&amp;P 500 Index (up 0.4%), the Russell 2000 Index (up 1.9%), and the Nasdaq Composite Index (up 0.1%).
Advanced Transportation Solutions (73.6% of the index) drove the index’s performance, rising 12.8%, while Energy Technology (6.8% of the index) was up 2.1% and Industrial Climate and Ag Technology was up 2.5%.
Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 25.0x versus 20.0x for the S&amp;P 500.


Weekly Sustainable Investing Surveyor : Week Ended June 9, 2023

<ul><li>TMC reported 1Q23 results, which included break-even EPS versus ($0.09) in the year-ago period, and use of $23.5 million in cash, leaving the company with $28.4 million in cash on hand, which along with still undrawn unsecured debt of $25 million, will be sufficient to fund ongoing operating expenses and working capital needs for the next 12 months, according to management.</li><li>Resistance is futile. The ISA meetings concluded in March 2023 included the commitment by all members to complete the undersea mining code, which management believes will result in said code being finalized in 2H23 and certain media observers recognizing that the commercialization of the industry is a question of “when” and no longer “if”.</li><li>While TMC would prefer to wait for the final mining code issuance to submit its exploitation application, management reserves the right to submit such an application, in accordance with ISA charter, even if final regulations aren’t completed by the end of 2023.</li></ul>

TMC reported 1Q23 results, which included break-even EPS versus ($0.09) in the year-ago period, and use of $23.5 million in cash, leaving the company with $28.4 million in cash on hand, which along with still undrawn unsecured debt of $25 million, will be sufficient to fund ongoing operating expenses and working capital needs for the next 12 months, according to management.Resistance is futile. The ISA meetings concluded in March 2023 included the commitment by all members to complete the undersea mining code, which management believes will result in said code being finalized in 2H23 and certain media observers recognizing that the commercialization of the industry is a question of “when” and no longer “if”.While TMC would prefer to wait for the final mining code issuance to submit its exploitation application, management reserves the right to submit such an application, in accordance with ISA charter, even if final regulations aren’t completed by the end of 2023.

TMC the Metals Company, Inc. - Deep-Sea Mining Is a Question of When, Not If

Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

<p>The global electric vehicle transition requires significant volumes of battery materials (see Edison’s note on critical minerals) and The Metals Company’s (TMC’s) deep-sea concession is a proven resource. The key to transforming this resource into a commodity or commercial production is an exploitation licence, which requires the International Seabed Authority (ISA), the governing body, to put in place the required legislation. The meeting to enact this regulation is scheduled for July 2023.</p>

The global electric vehicle transition requires significant volumes of battery materials (see Edison’s note on critical minerals) and The Metals Company’s (TMC’s) deep-sea concession is a proven resource. The key to transforming this resource into a commodity or commercial production is an exploitation licence, which requires the International Seabed Authority (ISA), the governing body, to put in place the required legislation. The meeting to enact this regulation is scheduled for July 2023.

The Metals Company - All set for a pivotal year

Canada

TMC the metals company Inc. operates as an electric vehicles battery metal company. The Company produces metals from polymetallic rocks to store clean energy and power electric vehicles. TMC the metals serves customers worldwide.

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TMC the metals co (TMC US)

TMC the Metals Company, Inc. - US Congress Weighs In on Deep-Sea Nodule Collection

Following the March 2023 ISA meetings, even ardent opponents of deep-sea mining had to acknowledge that the practice getting underway is a question...

Water Tower Research

Tmc the Metals Company, Inc. - As Headwinds Abate, Fundamentals Re-Emerge

The Danish shipping company, which had a significant equity position in TMC’s early days as a public entity, has completed the sale of its stake

Water Tower Research

Weekly Sustainable Investing Surveyor : Week Ended June 9, 2023

Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 25.0x versus 20.0x for the S&P 500.

Water Tower Research

TMC the Metals Company, Inc. - Deep-Sea Mining Is a Question of When, Not If

TMC reported 1Q23 results, which included break-even EPS versus ($0.09) in the year-ago period, and use of $23.5 million in cash, leaving the...

Water Tower Research

The Metals Company - All set for a pivotal year

The global electric vehicle transition requires significant volumes of battery materials (see Edison’s note on critical minerals) and The Metals...

Edison Investment Research

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