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Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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Thematic (Sector/Industry)

<ul><li>The WTR Sustainable Index was up by 5.8% W/W versus the S&amp;P 500 Index (up 5.9%), the Russell 2000 Index (up 7.6%), and the Nasdaq Index (up 6.5%).</li><li>Energy Technology (13.5% of the index) was up by 10.5%, while Industrial Climate and Ag Technology (48.7% of the index) was up 5.5%, ClimateTech Mining was down 1.3%, and Advanced Transportation Solutions was up 5.2%.</li><li>Top 10 Performers<strong>:</strong><span style="font-size: var(--content-font-size);"> LILM, HLGN, LICY, PEV, ARVL, FHYD, GMGMF, HASI, TMC, GCEI</span></li></ul>

The WTR Sustainable Index was up by 5.8% W/W versus the S&amp;P 500 Index (up 5.9%), the Russell 2000 Index (up 7.6%), and the Nasdaq Index (up 6.5%).Energy Technology (13.5% of the index) was up by 10.5%, while Industrial Climate and Ag Technology (48.7% of the index) was up 5.5%, ClimateTech Mining was down 1.3%, and Advanced Transportation Solutions was up 5.2%.Top 10 Performers: LILM, HLGN, LICY, PEV, ARVL, FHYD, GMGMF, HASI, TMC, GCEI

Weekly Sustainable Investing Surveyor - Week Ended November 3, 2023

Equity Bottom-Up

<div><div><div><div><ul style="list-style-type: disc;"><li><p>Keeping a tight rein on expenses. TMC reported 2Q23 results that included a significant reduction in SG&amp;A expenses from $8.1 million in year-ago period to $5.1 million, demonstrating the company’s ability to operate and move the NORI project forward at a significantly lower cash burn rate, suggesting that liquidity may be a diminishing investor concern.</p></li><li><p>Time to production extended; certainty increased.</p></li><li><p>While some observers may have been disappointed with the ISA’s failure to complete the undersea mining code creation process in July 2023, as originally envisioned, the July session featured the ISA’s renewed commitment to complete the code over the next three sessions (and inter-session discussions) that allowed TMC to announce a definitive timeline for NORI-D exploitation applications submission (3Q24) and beginning of commercial nodule collection envisioned under Project Zero (4Q25), establishing a timetable for getting to revenue and profitability.</p></li></ul></div></div></div></div>

Keeping a tight rein on expenses. TMC reported 2Q23 results that included a significant reduction in SG&amp;A expenses from $8.1 million in year-ago period to $5.1 million, demonstrating the company’s ability to operate and move the NORI project forward at a significantly lower cash burn rate, suggesting that liquidity may be a diminishing investor concern.Time to production extended; certainty increased.While some observers may have been disappointed with the ISA’s failure to complete the undersea mining code creation process in July 2023, as originally envisioned, the July session featured the ISA’s renewed commitment to complete the code over the next three sessions (and inter-session discussions) that allowed TMC to announce a definitive timeline for NORI-D exploitation applications submission (3Q24) and beginning of commercial nodule collection envisioned under Project Zero (4Q25), establishing a timetable for getting to revenue and profitability.

TMC the Metals Company, Inc. -The Resource Is the Resource

Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

<p>The proposed equity issue and additional resources will largely complete the funding requirement for The Metals Company’s (TMC’s) further environmental study and completion of its mining application, which it intends to file in July 2024. While the regulatory delays in the International Seabed Authority’s (ISA’s) implementation of the mining exploitation code were disappointing, momentum behind the legislative process remains positive and the stepping stones towards TMC’s production of battery metals from the deep sea are steadily falling into place.</p>

The proposed equity issue and additional resources will largely complete the funding requirement for The Metals Company’s (TMC’s) further environmental study and completion of its mining application, which it intends to file in July 2024. While the regulatory delays in the International Seabed Authority’s (ISA’s) implementation of the mining exploitation code were disappointing, momentum behind the legislative process remains positive and the stepping stones towards TMC’s production of battery metals from the deep sea are steadily falling into place.

The Metals Company - Two steps forward, one step back

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<li>The end is in sight. Although July 2023 meetings of the ISA ended without finalizing the international sea mining code, the agency made significant progress on the regulations with members re-committing themselves to complete the work on mining regulations in a timely fashion.</li>
<li>The ISA rejected an attempt by a group of nations looking for a long-term moratorium or a ban on undersea mining in international waters.</li>
<li>With three meetings scheduled through July 2024, the ISA will continue to work to build consensus and finalize the mining code.</li>
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The end is in sight. Although July 2023 meetings of the ISA ended without finalizing the international sea mining code, the agency made significant progress on the regulations with members re-committing themselves to complete the work on mining regulations in a timely fashion.
The ISA rejected an attempt by a group of nations looking for a long-term moratorium or a ban on undersea mining in international waters.
With three meetings scheduled through July 2024, the ISA will continue to work to build consensus and finalize the mining code.


TMC the Metals Company, Inc. - Extended Timeline Comes with Increased Certainty

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<li><span style="font-size: var(--content-font-size);">WTR Sustainable Index: During the week ended July 7, 2023, the WTR Sustainable Index outperformed the broader market, rising 3.3% W/W versus the S&amp;P 500 Index (down 1.2%), the Russell 2000 Index (down 1.3%), and the Nasdaq Composite Index (down 0.9%).</span></li>
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<p>Advanced Transportation Solutions (75.2% of the index) contributed to the index’s outperformance, rising 4.7%, while Energy Technology (6.5% of the index) was up 0.4% and Industrial Climate and Ag Technology was down 0.8%.</p>
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<p>Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 25.3x versus 20.5x for the S&amp;P 500.</p>
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WTR Sustainable Index: During the week ended July 7, 2023, the WTR Sustainable Index outperformed the broader market, rising 3.3% W/W versus the S&amp;P 500 Index (down 1.2%), the Russell 2000 Index (down 1.3%), and the Nasdaq Composite Index (down 0.9%).







Advanced Transportation Solutions (75.2% of the index) contributed to the index’s outperformance, rising 4.7%, while Energy Technology (6.5% of the index) was up 0.4% and Industrial Climate and Ag Technology was down 0.8%.


Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 25.3x versus 20.5x for the S&amp;P 500.



Weekly Sustainable Investing Surveyor Week Ended July 7, 2023

Canada

TMC the metals company Inc. operates as an electric vehicles battery metal company. The Company produces metals from polymetallic rocks to store clean energy and power electric vehicles. TMC the metals serves customers worldwide.

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TMC the metals co (TMC US)

Weekly Sustainable Investing Surveyor - Week Ended November 3, 2023

The WTR Sustainable Index was up by 5.8% W/W versus the S&P 500 Index (up 5.9%), the Russell 2000 Index (up 7.6%), and the Nasdaq Index (up 6.5%).

Water Tower Research

TMC the Metals Company, Inc. -The Resource Is the Resource

TMC reported 2Q23 results that included a significant reduction in SG&A expenses from $8.1 million in year-ago period to $5.1 million

Water Tower Research

The Metals Company - Two steps forward, one step back

The proposed equity issue and additional resources will largely complete the funding requirement for The Metals Company’s (TMC’s) further...

Edison Investment Research

TMC the Metals Company, Inc. - Extended Timeline Comes with Increased Certainty

The ISA rejected an attempt by a group of nations looking for a long-term moratorium or a ban on undersea mining in international waters.

Water Tower Research

Weekly Sustainable Investing Surveyor Week Ended July 7, 2023

Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 25.3x versus 20.5x for the S&P 500.

Water Tower Research

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