Greenbriar Capital Corp.'s (GRB:TSX.V; GEBRF:OTC) stock continues to look like it is shaping up for potentially massive gains. Technically, we will see why this is on its charts a little later, but first we will consider briefly its unique fundamentals.
Puerto Rico is still in an awful mess and has not recovered from Hurricane Maria, which trashed the place. Governor Ricardo Rossello is understandably fed up and is not looking for the sort of piecemeal "patch it up and limp along" solutions that characterized the past, rather he is looking for more radical and sweeping solutions to the island's chronic problems and thinks that privatization is the way to go. Actually, the hurricane was a blessing in disguise, not for its individual victims, of course, but for the long-term future of Puerto Rico, because by trashing a lot of the decrepit old infrastructure it has provided an opportunity to start over and rebuild a lot of it in a modern manner from scratch.
Enter Greenbriar, which has had a presence on the island for years, with its giant 100MW solar farm, known as the Montalva project. This project was approved several years ago, but after a major scandal was uncovered at the Puerto Rico Electric Power Authority (PREPA), PREPA tried to renege on the agreement and back out. In consequence, about a month ago, Greenbriar filed a lawsuit against PREPA for criminal racketeering, as requested by the U.S. Federal Court, for $951 million, which if they win the case, as looks likely, will yield over $55 per share (Canadian) for existing shareholders, and bearing in mind that the current share price is C$1.31, that is definitely something to look forward to.
The way things look, the Feds are simply to going to take control and straighten Puerto Rico out, and since the U.S. Federal Oversight and Management Board have recommended Greenbriar's Montalva project to be deemed a critical project to rebuild the power infrastructure, it certainly looks like Greenbriar is going to get the green light to go ahead and develop the project. So it is important to note that Greenbriar already has the $305 million necessary to construct the giant solar farm and does not need to go passing the hat round. Furthermore the groundwork has already been laid and the project has been approved to move to the next stage—all necessary permits, mayoral approval, data gathered for compliance purposes, etc. and the infrastructure to advance the project.
To sum up, the Feds look set to take over the rebuild of Puerto Rico, and will use a number of leading companies to get the job done, foremost of which is Greenbriar. In addition, Greenbriar will get a huge financial boost if it wins the legal battle with PREPA, as looks very likely as it has government backing, which will mean a giant windfall for Greenbriar's shareholders, especially as it only has 18 million shares outstanding.
Greenbriar has a number of other potentially very profitable business projects under development as well, that could make a big contribution to earnings in the future.
A final fundamental point worth making is that Greenbriar's CEO, Jeff Ciachurski, has a stellar history in building companies up. He started Western Wind Energy in 2002 with $250,000 in startup capital and sold it in 2013 for $420 million to Brookfield Asset Management, so this is a guy who knows what he is doing.
Turning now to the charts for Greenbriar's stock, we see firstly on its 6-month chart that it continues to shape up well. The volume pattern is strongly bullish with high volume surges driving up its volume indicators, and it continues to look like it is preparing to take out a band of resistance at about C$1.60–C$1.80, which we can better see on its 7-year chart lower down the page. There is a trend of higher lows and its moving averages would quickly swing into bullish alignment on any further advance. We have bought it on three occasions already at the favorable entry points shown, the 1st occasion being early in April, then early in May, and again late in May.
The long-term 7-year chart is interesting as it shows that a large base pattern has been forming since early 2016 that approximates to a bullish flat-topped or Ascending Triangle, with a clear band of resistance marking its upper boundary at about C$1.60–C$1.80 as mentioned above. With the volume pattern and volume indicators strongly positive, it appears to be building up to taking out this resistance, and once it does, we can expect a period of vigorous advance to follow. The next significant resistance is in the C$3.00 area. You may be interested to know that the color selected for Greenbriar's charts in Stockcharts is "solar," which is wholly appropriate, of course, given the nature of the company's work in Puerto Rico, where native Luis Fonsi's popular song Despacito may often by heard playing. Despacito means "slowly" or perhaps "take it easy" in English.
Greenbriar was the subject of an email alert yesterday pointing out that the reaction of recent days following the latest surge has brought it back into buying territory, and having closed unchanged yesterday it is still a buy here. Greenbriar is viewed as an exceptionally potent stock that is worth going overweight on.
Greenbriar Capital website.
Greenbriar Capital Corp, GRB.V, GEBRF on OTC, closed at C$1.31, $0.99 at 12 noon on 28th June 18.
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Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.
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1) Clive Maund: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. CliveMaund.com disclosures below. I determined which companies would be included in this article based on my research and understanding of the sector.
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Charts provided by the author.
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.