Best stock to invest in – GlyEco Expands Antifreeze Recycling Footprint

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by Debra Fiakas CFA

Glyeco recycles waste glycol into reusable antifreeze, windshield
wiper fluid and air conditioning coolants for the automotive and
industrial markets.   The used coolant and antifreeze
liquids are frequently contaminated with water, dirt, metals and
oils.  The company uses a proprietary technology at the
foundation of its recycling system to eliminate contaminants. 
The company focuses mainly on ethylene glycol in its six processing

Last month chemical recycler GlyEco,
OTC/QB) acquired Brian’s On-Site Recycling, a provider of antifreeze
and air conditioning coolant disposal services in the Tampa, Florida
area.  The deal extends Glyeco’s market share and geographic
footprint.  The company also gains expertise through the
members of Brian’s management team who have agreed to join Glyeco to
advance the Glyeco brand in Florida.  Terms of the transaction
were not disclosed and Glyeco is keeping mum on the revenue and
earnings contribution expected from Brian’s
Image result for glycol imageStill the idea of recycling a hazardous
chemical is beguiling.  Ethylene glycol and propylene glycol
are the preferred raw materials used for water-based antifreeze due
to a mix of favorable properties:  high boiling point, low
freezing point and thermal conductivity.  Glycol is typically
made from natural gas or crude oil  –  non-renewable and
polluting sources.    Glycol does breakdown in water,
but it can deplete oxygen levels and kill fish and other aquatic
life.  While propylene glycol is more or less non-toxic, it can
be extremely corrosive when exposed to air.  On the other hand,
ethylene glycol is decidedly poisonous.

The company is still struggling to get the business going.  In
the twelve months ending March 2016, Glyeco reported $7.5 million in
total sales.  Unfortunately, the antifreeze recycling business
is not profitable.  The net loss in that period was $12.3
million or $0.16 per share.  The company had to use $1.3
million in cash to support operations.  With a cash kitty of
$3.8 million at the end of March 2016, there is something of a
cushion for the company until the business gains sufficient scale to
generate profits.  The acquisition of Brian’s should contribute
to that end.

Debra Fiakas is the Managing
Director of
Crystal Equity
, an alternative
research resource on small capitalization companies in selected

Neither the author of the Small Cap
web log,
Crystal Equity Research nor its affiliates have a beneficial
interest in the companies mentioned herein.

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