Amid elevated inflation and an increasing reliance on credit, Canadians are being incentivized to save cash and turn away from equities, especially in the higher-risk penny stock space. This is particularly true for those who don’t possess the background or the nerve to invest for themselves.
A potential solution for this cohort, whose future spending power is currently most at risk, is to identify capital allocators with standout track records to invest their funds in. In this way, first-time investors can benefit from the financial markets while also sleeping well at night.
Over the past week, The Market Herald Canada had the chance to speak with three companies backed by allocators who fit this profile, each of whom paves a prospective long-term runway for shareholders to own their respective stock.
Ciscom: a roll-up company acquiring in the information and communication technology space
Our first Canadian penny stock pick is Ciscom (CSE:CISC), a holding company focused on offering exit strategies to entrepreneurs and growing their businesses in line with shareholder value.
The company’s two portfolio holdings, Market Focus Direct and Prospect Media Group, are active in big-data advertising and marketing technology. They produced combined 2022 revenue of C$34 million, well below Ciscom’s current market cap of C$11 million.
Ciscom management has identified an addressable market of approximately 3,500 Canadian businesses representing more than C$10 billion in revenue for future acquisitions.
Drew Reid, Ciscom’s executive chairman and CEO, “brings more than 30 years of management experience in business development, strategic planning, real-estate development and M&A, which aligns well with solving the idiosyncratic problems keeping small businesses from adding market share,” according to our profile on Ciscom released in August 2023. “He also has a long history of creating value as a consultant for public companies, as well as through money market, institutional bond and equity trade desks for the likes of Bank of Tokyo, the Canadian Imperial Bank of Commerce and Burn Fry Ltd.”
President and CFO Michel Pepin, certified public accountant (CPA), chartered accountant (CA), has “over 35 years of global business experience as a board member and special advisor for public companies, private equity and family owned businesses,” the profile continues, “during which time he built a reputation for improving processes, generating cash flows and maximizing return on investment across multiple industries.”
“Pepin’s leadership background in spearheading M&A deals, strategic corporate development, financial management and regulatory compliance spans IT, human resources, real estate, procurement, legal and insurance,” the profile adds, “making him ideally suited to assess business risk and identify SMEs worth acquiring.”
Ciscom stock (CSE:CISC) is down by 72.35 per cent since inception on June 30, 2023.
G Mining Ventures: a proven self-perform approach to mineral development
The story of G Mining Ventures (TSXV:GMIN) begins with Chairman Louis Gignac Sr., who is renown for building Cambior, an international gold producer that pioneered an in-house approach to construction and development, as opposed to the more conventional outsourcing of engineering, procurement and construction management contracts.
When Cambior was acquired in 2006 for US$1.3 billion after 20 years in business, Gignac went on to found G Mining Services (GMS), a family owned engineering and consulting firm with a 15-year track record of successful mining project execution under the same independent “self-perform” approach.
With high-profile clients such as Newmont and Lundin Group, and a combined construction cost of $2 billion, GMS has completed 100 per cent of its projects on schedule on or below budget.
The most recent evolution of the company saw G Mining Ventures go public on the TSXV in 2020 to facilitate accretive project acquisitions and realize the full value of GMS’s mine development capabilities.
G Mining Ventures’ flagship Tocantinzinho project in Brazil is composed of a “permitted, construction-ready, open-pit gold deposit containing 2 million ounces of reserves,” according to the company’s official website.
President and CEO Louis-Pierre Gignac spoke with Coreena Robertson about Tocantinzinho remaining on track and on budget for commercial production in the second half of 2024. For his part, Gignac offers more than 20 years of experience across all fields of mining and geology, including managing project development studies, providing open-pit expertise, financial modeling and economic evaluation of projects.
Tocantinzinho is 51 per cent complete approximately one year after announcing the construction decision.
G Mining Ventures stock (TSXV:GMIN) has gained 67.57 per cent over the past year and 726.67 per cent over the past five years.
LNG Energy Group: building Latin America’s next energy platform
LNG Energy Group (TSXV:LNGE) acquires and develops natural gas production and exploration assets in Latin America.
The company benefits from long-term, fixed-price US$ take-or-pay contracts, access to more than 800,000 nearby acres to explore and develop current assets, and a portfolio in a heavily studied production corridor boasting more than 16 years of 2P reserve life. It currently produces enough natural gas to power 70,000 homes.
This stable path forward aligns with Allied Market Research‘s estimate for the global natural gas market to grow from US$300.4 trillion in 2021 to US$424.7 trillion by 2031, representing a CAGR of 3.4 per cent.
Chairman and CEO Pablo Navarro has executed more than US$150 billion in capital markets and M&A transactions across the North American, South American, African and European energy markets. His experience includes tenures at multi-billion dollar operations such as BP, Citigroup’s Global Energy Investment Banking Group and Bank of America Securities, where he served as Global Head of Oilfield Services and Latin America Energy Investment Banking.
LNG Energy Group stock (TSXV:LNGE) is down by 25 per cent since inception on Sept. 12, 2023.
Join the discussion: Find out what everybody’s saying about Canadian penny stocks on the Ciscom, G Mining Ventures and LNG Energy Group Bullboards, as well as Stockhouse’s stock forums and message boards.
This is sponsored content issued on behalf of Ciscom, G Mining Ventures and LNG Energy Group, please see full disclaimer here.