Why Did Roots Sustainable Agriculture’s Share Price Increase Today?

Roots agriculture world-first pilot

Shares of Roots Sustainable Agriculture Technologies Limited [ASX:ROO] increased in value by 4.76% shortly after announcing the successful completion of its world-first pilot, combining RZTO temperature control and Nutrient Film Technique (NFT) technologies.

Roots’ shares are currently trading at 33 cents — 50.7% below the company’s 52-week high.

The agriculture company is developing and commercialising cutting-edge technology to address the critical problems within the industry, including plant climate management and shortage of water for irrigation. In summary, their technology makes it possible to heat and cool crop roots using minimal energy.

The outcome of Roots’ world-first pilot?

This morning Roots announced the successful completion of its commercial operation combining its RZTO temperature control and NFT technologies developed by Teshuva Agricultural Projects (TAP).

The two technologies combined increased production quality and the growing cycle by 20%, while ensuring that nutrient solution temperatures remained stable despite temperatures within the greenhouse of nearly 40 degrees.

The results show the potential for this technology to allow farmers to stabilise nutrient temperatures to significantly increase profits through more efficient crop management — even in extreme weather conditions.

Roots’ CEO, Dr Sharon Devir, commented on the pilot:

This is a major breakthrough in greenhouse crop control. No other commercial company in the world, as far as we know, is offering RZTO and NFT cooling systems for hydroponics or other substrates such as grow bags or soil. Until now, the only option farmers had to reduce heat load in greenhouses was to use large evaporative cooling systems with several fans. However, they are expensive to buy and operate, use a lot of energy, and increase humidity levels within the greenhouse which increase disease levels on plants.

What now for Roots Sustainable Agriculture Tech?

Earlier this month, Roots announced that it will be entering the US cannabis market — currently worth US$7 billion, estimated to increase to $22 billion by 2021 — commencing a pilot with American Farms Consulting LLC in Washington.

Despite the extreme volatility in its share value, the company has only had good news to share with investors in the past couple of weeks, all pointing towards positive growth for the company. This could be a stock worth keeping an eye on!

Regards,

Dannielle Rawlings,
For Money Morning

PS: Roots Sustainable Agriculture has a market cap of $9.87 million — classifying it as a small-cap stock. Our Analyst Sam Volkering believes that this is the sector with the biggest potential gains, which is why he has written a free report in which he reveals his top small-cap picks. If you’re interested in learning more, check out his free report ‘Top Three Aussie Small-cap Stocks’ today.

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