H2Diesel Holdings Inc. was awarded a 24-month target price of $11 and a “Speculative Buy” rating from Redchip. H2Diesel Holdings holds an exclusive license to manufacture an alternative “BioFuel” produced from vegetable oils and animal fats. The fuel is intended to be used in heavy equipment, marine applications, heating fuel and more.
The growing bioful industry offers a tremendous opportunity for companies such as H2Diesel to grow quickly and rapidly expand. The multi-billion dollar industry is projected to grow at least three times its current size. The company’s alternative bio-fuel has cerveral unique advantages over traditional biodiesel and could capture market share in the motors fuels market as well.
In conclusion the RedChip analyst stated, “As HTWO’s proprietary alternative biofuel product has distinct and compelling competitive advantages over traditional biofuel, we believe that there is good possibility that the company can achieve a 0.5% share of this $18.5 billion bio-fuel market. Thus, we see a market potential of $92.50 million for the company. We believe that a P/S multiple of 2 is achievable over a 24- month horizon, should the company’s proprietary technology gain commercialization, which we anticipate it would. We thus value the company at $185 million. Dividing this by approximately 17 million shares outstanding, we obtained our target price of $11.00, which is close to the 52-week high for the HTWO shares. This offers a potential for 83% appreciation from current trading levels.
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