Are we on the cusp of a green investing bull run?
It’s a legitimate question that is worth exploring. A question that one of our own analysts, Lachlann Tierney, has been trying to answer.
This time last week, for example, he outlined where to find green opportunities on the ASX. Noting that our local market does have some prime stocks with an ecological focus.
What I want to point out though, is one of the examples he provided. A tiny company that makes sustainable packaging: Secos Group Ltd [ASX:SES].
Because as he made evidently clear, this stock has undergone a huge breakout recently.
And today, Secos has backed up this recent rally with another round of good news. Namely, some successful inroads into the South American market.
Secos has been fortunate enough to strike a deal with a Mexican-based distributor. A private company known as ‘Infinite Source of Ideas’, or ISOI.
Under this partnership, ISOI will become the exclusive distributor of Secos’ Cardia Bioplastic material. Passing it on to local converters to make and sell compostable rubbish bags for retail sale.
And according to Secos, the early distribution trials have seen strong demand. So much so, that demand from retailers has exceeded $1.5 million worth of orders for the December quarter.
Naturally, that’s great news, as Secos’ CEO Ian Stacey comments:
‘We are extremely pleased to have developed a quality strategic distribution partnership with the team at ISOI.
‘They share our genuine passion for environmental technology and have a unique understanding of the Latin America market which is rapidly transforming to eliminate single use plastics.’
For investors, this deal could (and hopefully will) be the first of much more to come. Whether it’s general demand from Latin America or even other international markets in the future.
Either way, the future looks bright for this tiny ‘green stock’.
Going green for good?
As for whether you should buy Secos today, well that’s tough to say.
If the good news keeps coming (which it may), then the share price may have further to run. It is near impossible to gauge whether that will happen or not though.
And if Secos goes quiet for a little while, which wouldn’t surprise us, then we could see some pullback. After all, the same thing happened after their past two surges higher.
Therefore, I would caution potential investors to do their own due diligence.
Do some digging and decide for yourself if this stock is right for you.
As for ‘green investing’ overall though, there are plenty of other avenues. For instance, despite the sector’s chequered past, it’s hard to look past lithium stocks.
Contrary to what you might think, lithium appears to be making a comeback. With renewed interest likely to surge on the back on the growing need for battery-powered solutions.
For Money Morning