These Warrants Offer the Best Opportunity to Speculate on a Potentially Massive New Oil Discovery

Last week we wrote "Cheap Leveraged Upside on Potential Major Oil Discovery", a bullish call on Reconnaissance Energy Africa Ltd. (RECO.V) (RECAF) and in particular its warrants under the symbol of RECO.WT.A. It was based upon the announcement of results on RECO's Kavango West 1X well in Namibia. According to the press release: "Extensive wireline logging indicates ~85 metres (~280 feet) of net reservoir with 64 metres (210 feet) of net hydrocarbon pay across a gross interval of ~400 metres (~1,300 feet) containing multiple limestone reservoir units." 

Our thesis worked out perfectly as the stock moved up to $0.94 this past week and the warrants more than doubled to hit as high as $0.47 before pulling back to close the week at $0.38. Even though the warrants hit our initial target, we are still bullish as we think they offer a uniquely massive upside for two reasons. First, RECO looks like it will go on a continued run on excitement over its new discovery as it heads into the next phase of production testing in Q1. Second, RECO.WT.A is massively underpriced relative to its other set of warrants, which we think are correctly priced given the upside in the stock. 

Brian Reinsborough, CEO and President of ReconAfrica spoke with with Justin Cochrane, Head of Upstream African Research at S&P Global Energy on the positive results and next steps heading into 2026: 

This mainstream investor coverage of RECO's developing opportunity will only further add excitement towards the stock and warrants. Looking at RECO's other warrants only proves that point. In addition to RECO.WT.A, which can be exercised for one share at $0.60 until June 17, 2027, it has two other sets of warrants trading under the symbols RECO.WT and RECO.WT.B. RECO.WT expires at the end of July 2026 at a $1.75 strike price. RECO.WT.B expires on September 29, 2027 with a strike price of $0.72. When looking at a chart of the terms of the warrants and closing prices, you can see that the pricing is totally out of whack with RECO.WT.A being an undeniable bargain:

RECO closed the week at $0.94. With a strike price of $0.60 and a price of $0.38, RECO.WT.A trades with just a $0.04 time premium. This leads to an impossibly small implied volatility of 5%. Anyone with any experience with options and warrants, particularly on small cap stocks, knows that RECO.WT.A is trading at a bargain. Even without being bullish on RECO itself, one could set up some financial engineering to take advantage of the low IV on RECO.WT.A and incur some arbitrage profits. But we aren't here for that. We are here for upside potential. 

Because of the high strike price, RECO.WT has a time premium of $1.09. At Friday's close of $0.28, this leads to an implied volatility of 156%. We think that this is fair value. These warrants should be trading at this implied volatility because RECO's high, near term upside can lead it to trade well above the $1.75 strike price within the next six months. It's simply a case of RECO.WT.A and to a lesser extent RECO.WT.B being undervalued. RECO.WT.B trades at a 68% implied volatility. This is a deal, but because RECO.WT.A trades at a lower price despite having a strike price that is $0.12 lower, investors and traders should focus all of their capital on RECO.WT.A. The three months in extra time to expiry in 2027 does not offset the value of the lower strike price. That might be of importance in the spring of 2027, but right now both warrants have enough time to expiry.

Another way to look at RECO.WT.A being a bargain is to use the same implied volatility of the other sets of warrants and compare the price:

At a 68% implied volatility, RECO.WT.A would be priced at $0.48. At a 156% implied volatility, RECO.WT.A would be worth $0.70. The fair value of RECO.WT.A is likely somewhere in between. At a 90% implied volatility, the warrants would be worth $0.54. Keep in mind that this is the price the warrants should be trading today just purely on speculative upside and leveraging opportunity of RECO. If the stock has a week like it did last week and trades well above $1.00, these warrants will be worth even more. So will the rest of the warrants, but RECO.WT.A is unambiguously the best of the three. Because the warrants have only $0.04 of time premium, they have to go up with the stock at least penny for penny going forward. If the stock doubles to $1.88, RECO.WT.A will be worth at least $1.28, more than 4x upside from here. The other warrants don't offer quite that good of an upside. 

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Disclosure: We are long RECO.WT.A

Cheap Leveraged Upside on Potential Major Oil Discovery

On December 3, Reconnaissance Energy Africa Ltd. (RECO.V) (RECAF) shot up 38% from $0.48 to $0.66 in Canada upon the announcement of results on its Kavango West 1X well in Namibia. According to the press release: "Extensive wireline logging indicates ~85 metres (~280 feet) of net reservoir with 64 metres (210 feet) of net hydrocarbon pay across a gross interval of ~400 metres (~1,300 feet) containing multiple limestone reservoir units." 

The stock gained further momentum on Monday on excitement over the production test that is to come in Q1. It rose 11% to close at a day high of $0.72. We think RECO could head over $1.00 in anticipation of that test, which leads to a lucrative opportunity for traders. 

RECO has publicly traded warrants under the symbol RECO.WT.A that can be exercised for one share at $0.60 until June 17, 2027. These warrants closed on Monday at $0.21, leaving just $0.09 of time value on them for 1.5 years of leveraged upside. From here on in, the warrants are going to move up essentially penny-for-penny with the stock. If the stock was to move up another 39% to $1.00, these warrants would intrinsically be worth $0.40 and likely be a double from here with a couple more cents in time value remaining. These warrants are similar to the situation that we wrote about on Sintana Energy Inc. (SEI.V) (SEUSF) back in 2023. SEI also had warrants at the time and that was a very profitable trade.  

Options on a similar type of oil stock typically have an implied volatility of around 90%. Applying the same implied volatility to RECO.WT.A results in a fair value of $0.35 for the warrants. This is reflected in the leveraging opportunity of the warrants. Should RECO reach the $4.40 target as outlined by Research Capital by June 2027, a six times upside on the stock, the warrants would be worth $3.80, nearly 20 times upside from today's price.

To drive home how undervalued these warrants are, RECO has another set of warrants under the symbol RECO.WT.B that expire on September 29, 2027 with a strike price of $0.72. Those warrants closed at $0.20, despite having a strike price that is $0.12 higher. Considering that the expiries are 18 and 21 months away, respectively, we don't think that offsets the $0.12 higher strike price. RECO.WT.A should be several cents higher than RECO.WT.B.

RECO has a third set of warrants under the symbol RECO.WT that closed at $0.08 on Monday. These warrants have much poorer terms with an expiry at the end of July 2026 at a $1.75 strike price. Those warrants actually appear to be correctly priced as the implied volatility on them is 110%. People are buying at $0.08 with a Hail Mary shot that RECO will triple or more in the next several months. That is a reasonable gamble, although not one that we would take. Compare this to RECO.WT.A. RECO could double in the next several months and RECO.WT would be worthless. But RECO.WT.A would be worth $0.84. That's the kind of bet that makes sense in our eyes. 

If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1038 followers on here as well as 124 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers.

Disclosure: We are long RECO.WT.A

Energy Plug: Upgrading Target to $1.50 as $0.50 Target was Hit and the Company Starts to Generate Revenue

On January 22, we announced a bullish call on Energy Plug Technologies Corp. (PLUG.CN) (PLGGF) with a $0.50 target along with a follow up blog in October related to its partnership with Quantum eMotion Corp. (QNC.V) (QNCCF). We are upgrading that target to $1.50 as our initial $0.50 target has been hit. The pullback to $0.36 looks like a prime buy in opportunity as the company has been aggressively announcing revenue generating contracts. Some could say that PLUG has been riding the coattails of QNC. In reality, it's PLUG that is enabling some of QNC's first revenue generating opportunities and introduced a real world application of QNC's technology to the market place. QNC has a market cap of $700 million and that is cheap compared to other quantum startups. A $1.50 target price for PLUG puts it at a fraction of QNC's valuation. If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1038 followers on here as well as 124 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers.

We were engaged by PLUG to provide coverage after our reports on Blockmate Ventures Inc. (MATE.V) (MATEF) garnered positive attention. As such, PLUG turned into a sympathy play of MATE. As the price of MATE has unfortunately stagnated while PLUG has gone wild, we have seen the fortunes reverse. MATE jumped from $0.07 to $0.14 in a few days alongside PLUG's first move above $0.50. It has since pulled back to $0.10, but the opportunity should be clear. It moved on low volume so it wouldn't take much to get it trading back above $0.20 again. We expect that as PLUG moves up, MATE will get some more buyers. And if MATE has its own deals to announce, a quick move to $0.50 like what PLUG did won't be out of the question. The blueprint has been laid out and both stocks have a similar float. We have a $5.00 target on MATE based on it achieving one million users on its Hivello platform. It's still a long way off but the clear business model and previously stated user base goals makes a $5.00 target possible. As the PLUG business model becomes clearer, it's easier to make more aggressive price targets on it as well. 

PLUG was the first time we accepted compensation for coverage. Previous to that we said no, but we had to say yes to this company after getting an opportunity to participate in last year's private placement and understanding the unique leveraging of the technology and partnership with Malahat First Nations. We were quiet for a while as the company lacked news and a clear focus. As shareholders who bought a significant stake in the open market well in excess of any compensation we got, we were not happy as it sat around $0.10, but parked it to give time for the company to develop. It turns out that this was the right move. 

During the lull, PLUG laid the groundwork with the Malahat and QNC partnership and is now aggressively pursuing revenue generating contracts. That's in addition to a revamped management team and a coming rebrand to "Aegis Critical Energy Defence Corp.". This will more accurately reflect the company's evolution into a provider of secure, AI-enhanced, and quantum-optimized energy systems serving defense, industrial, grid, and government markets. Particularly in remote locations where grid infrastructure may not exist and security is paramount. A few months ago, PLUG's proposed business model was all over the place. The company even had crypto tickers on its website like it was pretending to be a crypto play. Now it has the right focus and investor and market messaging. This will soon be reflected in the bottom line and stock price.

Up to the date of its latest financials for June 30, 2025, the company did not generate any revenue. Even with the announcement of purchase orders last year. That will change as the company announced its first sale in the United States (very different wording from purchase order) of three Secure Energy Storage Systems in August for $290,000 and followed that up with a second sale of an ESS for an undisclosed amount in October. The company also announced a pre-order for 20 units with delivery expected in early 2026. Assuming each unit is close to $100,000, the total revenue for these three announcements would be about $2 million. How that revenue is split between PLUG and its partners will be known in future financial filings, but we believe that these contracts merely scratch the surface. There is an expectation from bulls that the company will be announcing $10's of millions worth of contracts in the near future, which would justify a much higher stock price than today. PLUG has once claimed a $700 million sales pipeline. As a pre-revenue company that lacked focus and couldn't get beyond the purchase order stage, that seemed like a pipe dream. Now that PLUG has partnered with QNC, Malahat and SEETEL to develop something truly unique in terms of a secure ESS, this number can be taken more seriously. 

The groundbreaking of Canada's gigafactory in B.C. between Malahat and PLUG received mainstream media coverage from Global News. This is not hype to pump a penny stock that only the bottom rung of Bay Street will care about. Given the recent ruling in a B.C. Court regarding Aboriginal land titles and Canada's long-standing battle to bog itself down in bureaucracy to never build anything, it can't be understated how valuable a First Nation-backed infrastructure project like this is. It can be used for consumption by the general public that is looking for some actual evidence of building back Canada's manufacturing base independent of the United States, and not just empty "elbows up" rhetoric. PLUG is well positioned to attract mainstream investor support.

Given the exciting times and hopes that this stock becomes the next QNC, one might wonder why there has been any selling at this level. We believe that the pullback and volatility around the company's stock price since it surpassed our $0.50 target is related to the exercise of warrants rather than people dumping the stock to exit the position. As part of the company's attempt at becoming more transparent and investor friendly, it has included two charts in its Q2 2025 SEDAR filings that very conveniently track the status of the warrants and its fully diluted share count. As we strive to provide accurate information to our readers, we can attest to how frustrating some companies can be with respect to reporting this information in a convenient format, so these charts are a breath of fresh air:

Approximately 10 million warrants were exercised between June 30th and October 28th, leaving another 25 million to be exercised. Presumably most of those warrants were exercised on or after October 14th when the stock price was high enough to justify doing so. PLUG's monthly progress report for October shows an updated share count of 122.9 million, meaning an additional 5 million warrants were exercised in those final few days of the month after October 28th. 

A total of 11.7 million warrants and options were exercised during October. Considering the pace of exercise seen in October, the first third of November has likely resulted in another several million being exercised. This is where the bullish argument has a two-pronged approach. Potential selling pressure created by the exercise of warrants is traditionally used as fodder by bears to create panic. Especially on a company that has 35 million of them expiring in a few months. PLUG already absorbed 15 million of those prior to November 1 and likely another several million since. Yet the stock price has remained steady in the mid-$0.30's after a rise from $0.10 a few weeks prior. There is no tank, in fact, the opposite. The second way of looking at it is that there is a ton of buying pressure. That pressure has been capped by warrant overhang. Imagine what will happen when that warrant overhang dries up? One could suggest that would happen in February when all warrants expire, but given the fast pace at which they are being exercised, we think this share overhang will dry up much sooner than that. Those waiting to buy in after the warrants expire are taking the risk that the warrants won't have effectively been swallowed up long before then and that the company won't have some follow up news to drive the stock up further. The warrants are also shoring up the company's balance sheet, with $1.5 million in cash being added to the balance sheet in October and another approximately $2.5 million to come. The company has never been in a stronger position than it is today. 

The traditional thought process of retail traders is "Why should I buy this stock so high when warrants can be exercised low?" The people who invested in this stock at that time did it when the company's risk profile was much less favorable than it is today. Now the company is ready to sell a uniquely secure energy storage system that won't be susceptible to cyber attacks. This story is a developing one and will garner positive attention after those warrants and past dilution at lower prices are long forgotten. It's up to retail investors who come across the story now if they want to buy in with a manageable position or take the risk that they will regret not doing so down the road. 

This leads us to our updated $1.50 target. While it's difficult to assess the value of a pre-revenue company using traditional valuation techniques, our $0.50 target was hit. This makes an upgrade to $1.50 more legitimate. Assuming all the warrants and options will be exercised, a $1.50 stock price results in a market cap of $224 million with working capital being approximately $5 million. A market cap of $224 million is significantly less than QNC and the rest of the quantum plays which have valuations over $1 billion and in many instances are also pre-revenue but with a much less clear and imminent path to revenue like PLUG and QNC. The partnership with PLUG and QNC enables QNC to move into its revenue-generating phase, so QNC shareholders will be supportive of PLUG and will likely allocate some funds towards it as well. Assuming a $100,000 price tag per each ESS, it would take 1,000 unit sales annually to garner $100 million in revenue. That should not be hard to achieve given the prerogative of spending on defense and "Canada First" by the Canadian government. Along with the numerous private interests such as data centers that would require cyber attack proof energy systems. Nor would a gigafactory be built if a thousand units a year wasn't an achievable expectation. Assuming the $100 million gross figure will be split among PLUG, QNC, Malahat and SEETEL, let's assume that PLUG may be entitled to half of that revenue, or $50 million. A $1.50 stock price would lead to a 4x to 5x revenue multiple, a reasonable valuation for a growth industry like this. While these numbers are still speculative, like MATE, at least there is a clear path to achieve them. 

Disclosure: We are long MATE.V. We are long PLUG.CN. We have been compensated in the past to write about PLUG, but have also engaged in open market buying and purchased shares in excess of the value of the compensation. 

Energy Plug Awakens After Partnership Announcement with Quantum eMotion

Our latest Canadian pick made at the end of May, Anfield Energy Inc. (AEC), has been on absolute fire on the back of a uranium bull market and an aggressive investment spree made by the U.S. Government into certain U.S.-based commodity projects. The warrants, AEC.WT, remain our top choice in this sector as not only is Anfield a highly prospective play, but the warrants remain underpriced with an implied volatility of less then 40% at $0.05. For comparison, Uranium Energy Corp. (UEC) options expiring in 2027 have implied volatilities of around 85%. AEC.WT would be worth $0.09 per warrant (it takes 75 warrants to exercise for one share) at an equivalent IV of 85%. We plan a follow up report on Anfield and its warrants, but for this piece we want to shift focus on a stock we talked about months ago, and finally looks ready to take off. That is Energy Plug Technologies Corp. (PLUG.CN) (PLGGF). If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1038 followers on here as well as 124 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers.  

Alongside the commodity bull market, quantum and battery technology/recycling plays have been hot. D-Wave Quantum Inc. (QBTS) has soared to a $15 billion market cap while Aqua Metals, Inc. (AQMS) tripled in price on Tuesday. With Tuesday's news release announcing a three way partnership between itself, Quantum eMotion Corp. (QNC.V) (QNCCF) and Malahat Battery Technology Corp., PLUG is now uniquely positioned as a bridge between these two industries, while also being modestly valued at $23 million market cap. The stock understandably shot up 64% to $0.205 on the news on Tuesday, and finally sits above our opening call price of $0.18. We expect the hype to continue as long as companies like AQMS move like they do and QNC pushes half a billion dollars in market cap. A run to $0.50 would still have PLUG trading at only around a $75 million market cap, even with nearly 40 million warrants and options outstanding that would shore up its balance sheet by bringing in over $5 million in cash upon exercise. 

The companies will be integrating QNC's QRNG2 chip into PLUG and MBT's Battery Energy Storage Systems (BESS) to create a power system that will be resilient to cyber attacks. This quantum-secured BESS architecture will be able to support Arctic defense installations and remote military bases along with utility-scale smart grids. At a time when Canada is supposedly looking to shore up its defense systems and rely less on the United States for critical defense infrastructure, these three home grown Canadian companies will be able to assist in these goals. All three of them are ideally positioned to call out any bluff made by Mark Carney and the Liberals, especially since MBT is of First Nations origin. 

Energy grids being vulnerable to cyber attacks remain one of the prime weaknesses within the developed world, but the issue is often overlooked by the market and the media unless a major attack happens at that time. Given the next wave of hype on the quantum industry, we think that news of this partnership is going to gain sustained traction. PLUG has unfortunately been a dead play ever since we first mentioned it, but that's because partnerships of this nature need to be constructed carefully and the integration of technology takes time. QNC is one of the most hyped technology plays in Canada right now. But with that hype comes intense scrutiny. The only way it teams with far junior partners like PLUG and MBT is if it thinks that these companies can execute on their end of the bargain with respect to their BESS.  

Our short term target remains $0.50 on PLUG as this early stage business model doesn't yet produce numbers needed for financial analysis. However, one cannot deny the potential it has to run well beyond that on hype. Critical Infrastructure Technologies Ltd. (CTTT.CN) hit a peak of more than $200 million in market cap after running from $0.05 at the end of August to as high as $2.49. CITT is a developer of autonomous, self-deployable communications systems for remote locations. Like PLUG, it's focused on security and surveillance of hard to reach places like the Canadian north. A significant amount of the design of CITT's system is dedicated to power generation and storage. A quantum-secure BESS should be of interest to a company like this. While PLUG should be of interest to CITT investors as they would understand and respect its business model which sets out to secure and enhance operations requiring power and communications in remote locations. 

Disclosure: We are long PLUG.CN. We have been compensated in the past to write about PLUG, but have also engaged in open market buying and purchased shares in excess of the value of the compensation. 

Two Hot Stocks With Big Upside That Investors Have Been Sleeping On

In May, we wrote about the potential of Anfield Energy Inc. (AEC) and in particular, its warrants (AEC.WT). The price of the warrants have since doubled to $0.04, but we remain quite bullish as we see multiple catalysts that could drive the stock and warrants up further. Along with AEC, Record Resources Inc. (REC.V) is another stock that has signed a very lucrative deal recently which offers significant upside. If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1039 followers on here as well as 124 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers.  

Anfield recently got uplisted to the NASDAQ, which has improved its visibility in the United States. This is part of the reason why we decided to write this update on the U.S.-focused blog instead of the Canadian one. Many uranium plays such as Uranium Energy Corp. (UEC), Denison Mines Corp. (DNN) and Energy Fuels Inc. (UUUU) have been making new 52-week highs, and AEC is no different. What makes Anfield stand out is that while those three aforementioned companies have valuations well over $1 billion, Anfield trades at around $140 million market cap at a $9.00 stock price. 

AEC's Shootaring Canyon Mill is one of the three uranium mills in the United States with the other two being owned by the much higher valued peers in UEC and UUUU. AEC first grabbed our attention on news of its Velvet-Wood uranium project in Utah getting accelerated approval from the Department of the Interior. It became the first uranium project to be approved by the U.S. government under President Trump’s emergency declaration to restore American energy independence. The project has an NPV $238 million U.S. and is just one of several uranium projects that AEC owns in the United States. Given that the U.S. consumes 50 million pounds of uranium annually but produces just 1% of it, AEC is in prime position to get accelerated approval on multiple projects. Its portfolio includes the Slick Rock Project, the West Slope Project and four other minor projects along with Velvet-Wood. We expect that financing for capex needs to get the projects up and running will be no issue given this environment.

At the time we wrote our previous piece, AEC was a penny stock. It since reverse split its stock 75 to 1 in order to facilitate the uplist to the NASDAQ. As a result, the float as sunk to 10 million with less than 16 million shares outstanding. It trades thinly with generally less than 100,000 in volume on both sides of the border. This profile makes it an ideal candidate to go on a massive meme stock or day trader run as a small amount of volume can really move the stock. Should several million shares trade in a day, we expect anywhere from a double to 10x mover like we have seen on many lightly traded IPO/recent uplists to the NASDAQ. The fact that it compares so well to uranium peers only helps the situation. 

We hold the warrants which trade exclusively on the TSX in Canada. They expire in May 2027 and had an initial strike price of $0.18. The rollback in the stock resulted in the warrants having an adjusted strike price of $13.50 and require 75 to exercise for one share. Should the stock hit $21.00 CAD, the warrants will intrinsically be worth $0.10, plus presumably some time value. While the warrants have doubled to $0.04 since we first wrote about Anfield, we feel that they still offer significant upside. A key factor to driving the value of the warrants would be the potential for options to be traded on Anfield's U.S. listing. The USD equivalent strike on the warrants is $9.75, meaning the warrants are just out of the money at a $9 stock price. For reference, a $15 call option on UEC expiring in January 2027 trades at $4. A $10 strike call option on AEC expiring at the same time likely trades at a similar price. Considering the 1/75th exercise ratio, exchange rate and slightly lower strike price and additional four months time value, AEC.wt's fair value under this situation would be $0.06 CAD. 

On September 12, REC.V shot up 175% from $0.02 to $0.055 on news of a joint venture with Reconnaissance Energy Africa Ltd. (RECO.V) and has continued to rise since with a stock price of $0.075 at the time of this writing. It has done so for good reason. This deal is ridiculously lucrative to REC, with the company acquiring a 20% working interest in the Ngulu Project in Gabon while bearing none of the costs.  The project highlights:

• Acquisition positions Record Resources as a significant West Africa E&P company.
• Fully carries Record Resources through the commitments on the Ngulu block through the initial four year concession period, including the drilling of a well to TD.
• Diversified portfolio with low-risk appraisal, development and exploration assets​.
• Near-term oil production potential could provide cashflow to fund exploration growth​.
• Capital-efficient entry terms include a large concession with minimal work phased over a four-year commitment.
• Advanced seismic reprocessing to unlock exploration upside while de-risking prospects.​
• PSC agreement, which covers 1,214 square kilometres and is roughly equivalent to 54 Gulf of Mexico blocks, is located in shallow offshore water in central Gabon.
• Ngulu is located on trend and offset to a number of sizeable producing fields, which range in size from 38 MMbbl up to 250 MMbbl.
• Existing oil discovery, the Loba field, was drilled in 1976 with 140 metres gross pay (70 metres net pay) provides for low-risk appraisal and development opportunities and near-term production.
• Loba field complex has potential production of ~20,000 Bbl/d (1)(2)(3)(4) based on offset fields.
• Significant exploration upside from an inventory of 28 mapped prospects (Lepidote Deep, Pompano Dentex Complex and the Palomite Complex) that are analogous to play types found in the Gulf of Mexico.
• Seismic reprocessing project to be undertaken to enhance imaging of prospects and reduce drilling risk.
• The consortium has committed during the initial four-year term to execute detailed geological and geophysical studies, advance 3D seismic reprocessing on an existing database and drill one well on the block.

"We are fully funded through the first phase of execution on a large oil and gas asset base with an existing oil discovery (near existing infrastructure), significant development upside and a large inventory of high-impact exploration plays in a proven oil-producing basin," said Michael Judson, Record's Chairman and CEO. "This opportunity in Gabon was identified by Record Resources who then deemed a strategic joint venture partnership with ReconAfrica was the best way forward to unlock shareholder value on this asset base. ReconAfrica is a highly experienced technical team and operator in Africa, and the Record team looks forward to an excellent partnership."

The existing Loba field itself has potential for 20,000 barrels per day. Since then, RECO raised $10 million in order to fund the project. REC is at a $8 million CAD market cap at $0.075 with no near term project expenditures, making the near-term dilution risk low. We think that REC should be at a minimum $20 million market cap, and we believe that it will get there in short order. 

Disclosure: We are long AEC.WT, REC.V

LogProstyle: Come for the Profits, Stay for the Crypto News Potential

Stocks that have jumped into Bitcoin treasury or other crypto related initiatives have been on fire. Some of them like Bitmine Immersion Technologies, Inc. (BMNR) and SharpLink Gaming, Inc. (SBET) have run over $100. But the original big gainer behind Strategy Incorporated (MSTR) was a Japanese listing called Metaplanet Inc. (MTPLF). It has been Japan's best performing stock and has increased by 7,500% since March 2024 after enacting its own aggressive Bitcoin treasury strategy and implementing crypto into its core business. LogProstyle Inc. (LGPS) is a U.S.-listed Japanese-based company that shares a lot of the same traits as Metaplanet. Not only that, it's a small float stock that is profitable and growing. So it has the incentive and ability to copy the Metaplanet business model and take off like it has. If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1038 followers on here as well as 124 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers.  

Prior to its Bitcoin treasury strategy, Metaplanet was a struggling hotel management operator. LGPS is primarily in the real estate and renovation business in Japan, but also has a hotel management business. It owns four hotels with plans to expand globally. The company released fiscal year 2025 (ended March 31) results with the following highlights:

• Total revenue of JPY20,651 million (US$138 million) for the fiscal year of 2025, up 46% compared with JPY14,122 million in fiscal year 2024.
• Real estate revenue of JPY18,819 million (US$126 million) increased by 52% over the previous year.
  • The number of real estate units sold was 187 units, an increase of 89 units from the previous year, of which 102 units were new condominium development units, an increase of 62 units from 2024. The number of renovated condominium units sold was 40, representing a decrease of two units from the previous year.
• Hotel revenue reached JPY1,249 million (US$8 million), up 20% from the previous year.
  • Occupancy rate increased by 390 basis points to 74.7%, while average daily rate (ADR) for hotels operated by the company decreased by 13%.
• Gross profit reached JPY3,559 million (US$24 million), an increase of 34% from fiscal year 2024.
• Operating income of JPY1,343 million (US$9 million), up 43% from JPY939 million. Operating margin steady at 6.5%.
• EBITDA of JPY1,487 million (US$10 million) , up 45% from JPY1,019 million.
• Net income increased 133% to JPY754 million (US$5 million) from JPY324 million, and earnings per share grew by JPY19.39 to JPY34.76 (US$0.23 ).

With 46% growth and a $0.23 EPS, it's understandable why the stock price doubled from $0.84 to $1.70 on over 70 million shares traded on Monday upon release of the results. The stock price has consolidated and settled, creating a good entry point for those value investors who are smart enough to recognize the opportunity. LGPS is currently trading at a 7.4x earnings multiple despite the strong growth and profitability numbers across the board. The company has also enacted a share repurchase program of up to 1.1 million shares. This is significant given that the float is just 5.7 million shares. 

Now consider the earnings multiple of Metaplanet, which is over 200x. Should LGPS enact its own crypto treasury strategy, the stock price has up to 3,000% upside potential just to get in line with Metaplanet's valuation. But even if it doesn't enact a crypto strategy, it is undeniably undervalued. Come for the profits, stay for crypto news potential. 

Disclosure: We are long LGPS

A Pair of Buyout Offers Leads to Over 100% Upside for Shareholders

Usually investors have to get lucky with buyout offers out of the blue. Today's small cap market is so out of whack that there are two existing proposals on the table that offer significant upside if investors buy in today. Both stocks have gone up since their announcement, but have a lot more room to go and are prime targets for a bidding war. They are Banxa Holdings Inc. (BNXAF) (BNXA.V) and Theratechnologies Inc. (THTX) (TH.TO).  If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1036 followers on here as well as 124 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers.  

The first one we are going to talk about is Banxa. We need to mention that Banxa's Founder Dom Carosa is also the President and Chairman of Blockmate Ventures Inc. (MATE.V), a stock that we remain very bullish on with a $5.00 long term target. The implications of buyer interest on Banxa supports a bullish case on MATE too. 

To avoid any confusion, BNXA is most liquid on its Canadian listing and the offer is in Canadian Dollars. So any reference to prices for it is in CAD. THTX is most liquid on its U.S. listing and the offer is in USD. So any reference to prices for it is in USD. 

BNXA spiked as high as $0.84 on Tuesday before settling at $0.72 today after the announcement of a buyout offer from Mr. Khurram Shroff between $1.00 and $2.00 per share. The price level now represents a great entry point as we think it's only a matter of time before the stock trades well over $1.00 as rumors heat up of a bidding war. BNXA already had a buyout offer on the table at $1.69 from Exodus Movement, Inc. (EXOD) before letting it expire as well as a take private offer that was since terminated. We view both of these transactions as opportunistic as the take private offer was at a low price and the Exodus buyout offer had a short deadline to acceptance. This one looks to be more serious and well thought out and should be a winner for investors getting in at these prices. 

The press release from the bidder:

"The company backed by renowned crypto and blockchain investor, Khurram Shroff, announced today that it has submitted a letter to the board of directors of BANXA Holdings Inc. (TSXV: BANXA.V). It expressed intentions to acquire 100% of the issued and outstanding shares of the company. The company proposed a purchase price in the range of $1.00 to $2.00 per share.

This offer represented a 100% to nearly 400% premium over BANXA’s closing share price of CAD 0.51 as of last week.

Acquisition to Benefit Shareholders

The letter signals a serious and friendly offer with the goal of engaging in meaningful discussions with the board and management team of BANXA Holdings. The Khurram Shroff-backed entity believes that the proposed acquisition would unlock significant value for shareholders. It could enhance long-term strategic growth and leverage synergies between its digital asset ecosystem and BANXA’s on-ramp infrastructure.

The investor group, headlined by Khurram Shroff, consists of strategic financial investors based primarily in the Middle East. They are highly reputable investors with a proven track record of successful transactions and value creation in the crypto sector. 

Shroff is a serial entrepreneur and the Advisor to 3iQ, the first Bitcoin ETF in the world. He comes with over a decade of experience in the blockchain industry and always promotes innovative projects.

The group possesses substantial financial resources, strategic insight, and operational expertise. Their collective experience and strong financial backing underscore their ability to execute this transaction efficiently. It can certainly enhance the long-term value of Banxa.

Acquisition to Benefit BANXA?

BANXA Holdings (TSXV: BANXA.V) is a publicly traded company. It provides a leading global payment infrastructure for the crypto economy. The acquisition would position the company within a larger, forward-thinking digital finance ecosystem. It will strengthen BANXA’s long-term outlook through added investment and strategic alignment.

“BANXA has demonstrated strong potential in the digital payments and Web3 infrastructure space. We believe our offer is both generous and in the best interest of BANXA shareholders, and we are eager to enter into constructive discussions with the Board,” said a spokesperson for the acquiring company.

The company currently operates in Australia, Europe, and North America. It is helping crypto enthusiasts buy cryptos and NFTs swiftly. Banxa users can buy cryptos and NFTs directly with fiat currency. The process is straightforward, and therefore, Banxa has drawn admiration from many users and experts. 

The proposed transaction is expected to be financed through a combination of cash and equity. It is not subject to a financing condition.

About Khurram Shroff

Khurram Shroff is one of the earliest and most influential crypto investors in the Middle East, Asia, and Africa. Referred to as the “Arab Whale,” Khurram has been recognized globally for his visionary investments in blockchain, AI, and fintech. 

The UK Parliamentary Review Power100 featured him as one of the most influential Muslims in the world. He is an active supporter of initiatives advancing Web3, decentralized finance, and AI for good."

The bid came with a very wide range between $1.00 to $2.00. It was likely offered with that range to get the conversation started before a more definitive offer is made. This approach makes more sense than the coercive or lowball tactics of the previous bids. Shroff mentioned that this offer is serious and friendly, so we expect the stock price to move up as the market digests it and talks advance. As this is the third offer on the company in a few months, we think it's only a matter of time before there is a bidding war. $2.00 might be the start, not the ending price here. Exodus didn't play by its hardball tactics because it plans on easily giving up. We think it's likely that it enters back into the running with a revised bid and more reasonable timeline. Especially if the more friendly tactics from Shroff leads to a positive response from BNXA. 

That leads us to THTX next. It increased 46% today to $1.94 after the announcement of a buyout offer from Future Pak:

"Future Pak, LLC (“Future Pak”) today announced that it has submitted two formal proposals since January to acquire all outstanding shares of common stock of Theratechnologies Inc. (“Theratechnologies”) (NASDAQ: THTX). The most recent proposal, which remains open for consideration by Theratechnologies and its Board of Directors, offers a cash consideration of $3.51 to $4.50 per share.

The proposal represents a total enterprise value of up to $255 million, comprising:

$205 million in cash at closing, and

Up to $50 million in contingent value right (CVR) payments, including:

50% of the annual EGRIFTA® franchise gross profit (defined as net sales minus cost of goods, per U.S. GAAP) above $30 million annually for three years post-closing.

A $10 million one-time milestone payment if cumulative EGRIFTA gross profit exceeds $125 million over the same three-year period.

This offer implies a 164% to 238% premium to Theratechnologies’ closing stock price of $1.33 as of April 10, 2025.

“To move this process forward efficiently and deliver compelling value to Theratechnologies’ shareholders, we have submitted multiple offers outlining a flexible and attractive framework,” said Nirav Patel, Chief Growth Officer at Future Pak. “We believe this proposal provides significant upside and a solid foundation for constructive dialogue, with the goal of achieving a mutually beneficial transaction.”

Despite repeated outreach and the submission of two detailed proposals—each offering a premium of more than 100% over Theratechnologies’ trading price—Future Pak has received minimal engagement from the company to date.

Future Pak confirms that the transaction would not be subject to a financing contingency and has the full support of its strategic financial partner, Colbeck Capital Management.

Future Pak has engaged Bourne Partners Securities LLC as financial advisor and Honigman LLP as legal advisor. Given access to standard due diligence materials, Future Pak believes it could reach a definitive agreement and announce a transaction within four to six weeks.

By publicly disclosing its interest, Future Pak hopes to encourage Theratechnologies shareholders to engage with the proposal and ensure that the Board fulfills its duty to pursue the highest value outcome available."

Future Pak stated that this was a follow up to a previous offer, but this time around it is going public with it in order to engage shareholders, presumably to try to force the Board into a public response. At $1.94, the bid offers a minimum 81% upside, with another dollar per share tacked onto that should the contingent value rights successfully pay out. 50 million shares traded in the United States and Canada on Friday. That is more than the entire float. If there are investors who want to get this deal done, they can easily buy up shares on the open market and influence the decision. Unlike BNXA, THTX has enough liquidity. THTX adopted a shareholder rights plan many years ago that we believe is still active. But that only prevents an organized group of people from attempting a hostile takeover. Individual activist shareholders are free to buy up shares on the open market and push for the deal to get done. However, based on the quick response from management, they may not need to fight too hard to make money. 

THTX ended up responding to the offer after hours on Friday:

"Theratechnologies Inc. (“Theratechnologies” or the “Company”) (TSX: TH) (NASDAQ: THTX), a commercial-stage biopharmaceutical company, wishes to address its shareholders in response to a press release issued today by Future Pak, LLC (“Future Pak”) regarding its proposals to acquire the Company.

The Company believes its shareholders should be aware of the following:

In August 2024, the Company received a first unsolicited non-binding proposal from Future Pak to acquire the Company. The proposed closing cash consideration of US$100 million was not attractive to the board of directors of the Company (the “Board”) and the proposal was rejected by the Company.

The Company received a second unsolicited non-binding proposal from Future Pak in January 2025, which could not be entertained as the Company was under exclusivity with another potential acquiror (the “Potential Acquiror”).

The Company did not immediately renew its initial exclusivity period with the Potential Acquiror upon its expiry, in an attempt to enter into a customary non-disclosure agreement with Future Pak containing a typical standstill undertaking in order to discuss with Future Pak under normal rules of engagement. Future Pak’s initial position was that it would not sign such an agreement unless they were provided exclusivity. When Future Pak was finally prepared to sign a non-disclosure agreement, the Company had already renewed exclusivity with the Potential Acquiror. At this time, Future Pak was informed that it would have a future opportunity to engage with the Company.

The Future Pak non-binding proposals have been made without Future Pak having completed any due diligence on the Company other than publicly available information.

The Potential Acquiror has performed extensive due diligence on the Company and the parties are negotiating a definitive agreement relating to a potential acquisition of all outstanding shares of the Company. Based on the Company’s discussions to date with the Potential Acquiror, in the event a definitive agreement is entered into with the Potential Acquiror, it will contain a “go shop” provision allowing the Company, for a limited period following signature, to engage with other potential acquirors, including Future Pak."

The stock was up after hours, but we think the real action will be on Monday morning when the market has had time to digest the implications of this response. Future Pak going public with its offer forced THTX to admit that it was already in buyout talks with another suitor. THTX is now in the middle of a bidding war. This is no longer up for debate. If and when the other Potential Acquiror signs an initial deal, that is when Future Pak will have the opportunity to make a move during the go shop provision. Even with the shareholder rights plan, things could get very interesting with respect to open market buys as various suitors maneuver their way in order to be the winner. 

We have three targets on each stock. The low end of the existing bid proposals, the high end of the existing bid proposals and a third target that is our estimate should either company get into a bidding war. 

We think BNXA could fetch $4.00. It has gotten three offers between $1.00 to $2.00 in the last several months. It isn't getting those offers because the buyers think it's worth only $2.00 and aren't willing to pay more. We already mentioned that we don't think Exodus is done here and that this latest bid could entice it back into action.

We think THTX could fetch $7.00 in a bidding war. Future Pak has already substantially increased its offer from $100 million last August to $205 million today plus $50 million in CVR. THTX management has also disclosed that Future Pak continues to sniff around even when it tries to throw its weight around and get THTX to play by its rules. Going public is actually a sign of desperation because it wanted shareholders to be on its side. But now everyone knows there is an alternative bidder who is much further along in the process. A final price tag of around $350 million appears reasonable given that context. Both of these companies offer investors and traders significant near-term upside, so we suggest to watch both of them closely. 

Disclosure: We are long BNXA.V, THTX