Is Noveko set to cash in on the “green building” movement?

Ask investors to play the word association game with Noveko (TSX:EKO) and it won’t be long before the words swine flu show up. The Montreal company soared during the swine flu scare of 2009, when its antimicrobial surgical masks were flying off the shelves. An independent lab test showed the masks could inactivate the Human Influenza A Virus (H1N1) at 99.9% over a period of thirty minutes.

A press release announcing a sale of the masks to Garda, an international security firm with more than 45,000 employees captured the frenzied environment at the time. Garda’s chief of Canadian physical security, Marc-Andre Aube, noted that “in the current context, any prevention measures aimed at limiting the risks of a pandemic or any other health hazard must be seriously considered.”

Shares of Noveko, which had bottomed out at $0.56 cents late in 2008, raced to near three dollars the following summer, when the US Centers for Disease Control and World Health Organization and the control stopped counting cases and declared a pandemic.

But in August of that year, when the World Health organization declared that the H1N1 virus had run its course and the threat of the swine flu fizzled out, so did shares of Noveko. By Last Tuesday, March 29th the stock was trading at just $0.325 cents. But Noveko’s stock has stormed back in the last three sessions, highlighted by a rise today that has shares up more than 50%, to $0.75 cents at press time.

Sparking the suddenly renewed interest is a press release that means those playing word association with Noveko will have to learn a few new phrases, in particular the acronyms HVAC and HTS. HVAC, stands for heating, ventilation and air-conditioning. While HTS, a company based out of New York, is the the largest independent commercial HVAC manufacturers’ representative in North America.

Noveko, today, announced a three year agreement in which HTS will incorporate Noveko filtration systems into its HVAC systems. HTS’s Jason Eitel said the move is spurred by a movement towards cleaner and more energy efficient buildings and “green building designations such as the LEED certification are fast becoming an industry standard”.

The HTS agreement comes on the heels of recent sales that show Noveko, which holds patents across a variety of antimicrobial products including hand sanitizers, surgical masks and respirators, may already be benefiting from the green building movement. The company recently made its first sale into the US real estate market by installing filters into a 21-storey condo tower in the Upper East Side of Manhattan. Noveko also outfitted the Hilton Luxembourg hotel and another office building in Switzerland.

Despite the recent recession, a recent report from McGraw-Hill hints at a green building frenzy. It said the “value of green building construction starts was up 50% from 2008 to 2010” The study goes on to say that green buildings now represent 25% of all new construction activity in 2010. McGraw-Hill expects the market will reach $135 billion by 2015.