Is Calix (ASX:CXL) the Next Big Environmental Play?
Jason McIntosh discusses why Calix is an ASX small cap with loads of potential. This interview appeared on Ausbiz on 3 February, 2021.
Host: Jason, a stock you’re looking at is Calix Ltd [ASX:CXL]. Now this is involved in Europe in the LEILAC project, which is the Low Emissions Intensity Lime and Cement project. Just tell us what that is and what the involvement is?
Jason: Yes, this is another one of those off-the-radar companies. It's only been listed for about 12 months. I just love the company's tagline: Mars is for quitters, because there's only one Earth. So yeah, it's all focused on environmental aspects, which I think are going to be a growing theme over the next coming years.
Calix is involved in wastewater, crop protection, and CO2 emissions. And the LEILAC project is an initiative in Europe. It's about reducing CO2 emissions from cement and line production. They have EU research funding, and they have some big industrial partners in the project. Phase one is complete — which was successfully piloting a test in Belgium. They are now moving to phase two where it's scaling that up to a demonstration plant.
The big recent news is that a large global cement business called CEMEX is coming as one of the partners in the project. I think that gives real validation of Calix’s technology.
Now, CXL is a stock that my algorithms identified in 2020. You see, I scan the market daily for what's moving, and this is how I find these ideas which are a bit off mainstream. It’s about looking at the price action then seeing what the story is.
So Calix triggered my interest back in August at around $0.90. Some people will hear that’s it’s now $1.50 and say it's too late. But the way these things often work is that following the price action and buying into a rising trend is often a good thing. And that’s because the path of least resistance is the direction the shares are currently heading. An uptrend will often trend higher, downtrend lower. So, I'm quite open to buying a stock like Calix that’s had a bit of a run.
I think there's a lot of potential upside should this story take hold. Management also has an 8% interest in the company, which is positive, in my view. It's good when management has a vested interest and is on the same page as shareholders. I think Calix is a high potential stock with significant medium to longer term potential.
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I'm Jason McIntosh, the creator of Motion Trader. My career began in 1991 on the trading floor at Bankers Trust. Nowadays, I trade my own systems from home in Sydney.
Motion Trader is for investors who value robust analysis, data driven entry and exit signals, commentary, and education. I use engineered algorithms to identify when to buy and sell ASX stocks. No biases or guesswork, just data driven signals.