Clean Diesel Technologies (CDTI)- Spectacular Claim!
Clean Diesel Technologies (CDTI) is catching some serious attention from investors.
Shares of the micro-cap emission control company are surging upon the announcement of a potential breakthrough in catalytic converter design.
According to a recent press release, CDTI received two patents from the US Patent and Trademark Office for its previously confidential Spinel technology.
Believe it or not, CDTI believes they can eliminate the use of platinum and palladium (PGMs) in catalytic converters with Spinel!
What’s the big deal about that?
In case you’re unaware, catalytic converters are required on all motor vehicles in nearly every country. The essential device sits in the exhaust system, converting toxic pollutants into less harmful emissions before they leave the car.
But the fact catalytic converters require costly rare metals to function properly makes them quite expensive.
According to Chris Harris, CDTI CEO, original equipment manufacturers (OEMs) spend approximately $6 billion annually on PGMs and rare earth metals to put into catalytic converters.
But listen to this…
CDTI’s Spinel technology uses a “family of proprietary materials using various base metals that replace costly PGMs and rare earth metals in coatings on standard catalytic converters.”
Folks, that’s a remarkable claim!
If true, it’s a game changer, not only for CDTI, but for the global platinum and palladium (PGM) markets.
As it sits now, approximately 50% of global PGM production goes into the automobile industry. If a large portion of global demand disappears, you can bet PGM prices will fall precipitously.
To be clear, CDTI’s new catalytic converter is still in testing. But if Spinel proves to be the breakthrough the company says it is… watch out. CDTI will likely see massive revenues flow into their coffers as OEMs gobble up their cost effective converters.
Now, before you rush out a buy CDTI, consider this…
There’s no telling how long it will take CDTI to get their product into the hands of OEMs.
Realistically, it could be quite some time before the company sees a penny of revenue from Spinel.
And judging by the company’s Q3 financial results (which were released this morning), that revenue can’t come soon enough. While CDTI had sales of $9.3 million from other emission products in Q3 2014, they turned a hefty loss of $0.13 a share.
In response to the lackluster earnings report, it’s likely CDTI gives up a large portion of the gains seen in recent trading.
Despite this, you want to make sure CDTI is on your watch list. If shares drop into the low $2 range, patient investors will likely start accumulating shares before the next big run to higher prices!
Until Next Time,
Justin Bennett
Category: Commodities
