TICKERS: PTE

Home Cooking Fires Four Times More Likely on Thanksgiving, But This 'Undervalued' Company Aims to End That

Source:

A company that has products that prevent home cooking fires has one analyst calling it an "undervalued and underfollowed play on new safety requirements."

As families and friends gather to celebrate Thanksgiving this year, remember to exercise caution when cooking because Thanksgiving is the most dangerous day for cooking fires, followed by the day before Thanksgiving, Christmas and Easter, according to the National Fire Protection Association (NFPA). While cooking fire is always a risk, it is especially so during the holidays.

Cooking equipment, reported the NFPA, "was involved in almost half of reported home fires and home fire injuries." Cooking fire is the leading cause of household fire across North America. It is the leading cause of fire injuries and results in more than $1 billion in direct property damage each year.

Pioneering Technology Corp. (PTE:TSX.V) is working to solve the issue of cooking fires. It owns disruptive technology and products that are designed to help stop cooking fires from happening in the first place. Since 2008, its patented temperature limiting control technology has been installed in more than 250,000 households across North America without a single cooking fire being reported. From 2013 through 2016, Pioneering Technology has had a compound annual growth rate of 69%.

Pioneering Technology's SmartBurner already meets a new UL 858 standard for cooking fire prevention that will become mandatory for all electric stoves in April 2019.

In October, Pioneering announced the completion of largest purchase to date, for about 20,000 four-burner SmartBurner kits from one of North America's largest suite-hotel companies. The company stated that this hotel chain has now "ordered and installed SmartBurner in approximately 74,000 hotel rooms in more than 600 of its hotel properties."

Analyst Russell Stanley with Echelon Wealth Partners, in an Oct. 4 report, stated that the firm continues "to view PTE as an undervalued, underfollowed play on new safety requirements that should drive strong demand growth for the company's cooking fire prevention products."

"Echelon has a Speculative Buy recommendation on Pioneering and a 12-month target price of $1.60 per share. The stock is currently trading at $0.71."

He views the completion of the hotel order "positively as it reflects strong follow on demand from the hotel chain market. . .This market segment (hotel/motel chains and corporate housing with fully-equipped kitchens) represents an attractive market opportunity for Pioneering, and we expect the Company to pursue additional customers in this space."

Echelon has a Speculative Buy recommendation on Pioneering and a 12-month target price of $1.60 per share. The stock is currently trading at $0.71.

Nick Hodge, writing on Oct. 5 in Early Advantage, noted that "revenue for 2017 is on a C$10 million run rate. So far this year sales are 71% higher than at the same point in 2016."

Hodge explained that "less than 1% of the existing electric coil stoves in North America have been retrofitted. So many orders are still to come, in my opinion. Equally as exciting are the new UL stove standards that go into effect in April 2019. To pass, a pot of oil is placed on the stove and the burner turned to high. If the oil ignites within 30 minutes, the stove fails. If it doesn't catch fire, the stove passes. Pioneering remains the only company that can pass this test."

"The stock 'is a buy under $1.10.' – Nick Hodge"

"April 2019 is right around the corner," Hodge noted. If the major appliance manufacturers "want to meet the new standard in time, they are going to have to act soon. Pioneering's technology being incorporated into new stoves on the factory floor becomes likelier and likelier with each passing day." Hodge wrote that the stock "is a buy under $1.10."

Technical analyst Clive Maund of CliveMaund.com noted in May that Pioneering has "developed a unique technology around cooking implements and equipment that prevents kitchen fires, the biggest cause of home fires, and thus promises to save insurance companies billions of dollars. This technology is in its way as revolutionary as catalytic converters were for the auto industry many years ago, which at a stroke largely eliminated the smog problem in Los Angeles and other big cities, and there is a good chance that the government will mandate the use of the company's products—if that happens this stock will go ballistic."

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