Arrow Capital Management’s Alex Ruus says Neptune Technologies offer the “most compelling risk/reward” of all the stocks he owns. It’s been a difficult year and a half for Neptune Technologies (TSX:NTB), but one portfolio manager says he is very excited about the company’s potential moving forward.
Alex Ruus of Arrow Capital Management was on BNN’s Market Call Tonight yesterday to talk about his current top picks. One Canadian junior he thinks has “blockbuster” potential is Quebec-based Neptune Technologies.
Ruus says he is “very excited” about Neptune and the myriad of changes that have happened since the tragic events of 2012, when the company’s Sherbrooke plant exploded. “You are going to see this company go from a money losing situation to a profitable situation again,” says Ruus.
Ruus says part of the reason for his bullish take on Neptune is its more than 50% ownership stake in Acasti Pharmaceutical. He believes that company’s lead prescription drug candidate, CaPre®, a treatment for abnormally high levels of triglycerides, has monster potential.
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“To me, this is absolutely the most compelling risk/reward in my portfolio and I am absolutely pounding the table on this one at this point,” says Ruus.
Neptune that rose to prominence on the increasing popularity of krill oil as a nutritional supplement and fell when, on November 8, 2012 an explosion at its plant in Sherbrooke killed three people, injuring eighteen more and destroyed the company’s entire inventory. The company became subsequently mired in red ink and a class action lawsuit that was ultimately dismissed.
Last Friday, Neptune announced that it had received all required operating permits and will resume production at a new plant that management describes as “state of the art” and features “robust” safety measures.
“In a market where product differences are scarce, Neptune’s differentiated offerings, backed by a strong and recognized patent estate, put the corporation in a solid position to capitalize on the fast-growing omega-3 nutraceutical space,” said Neptune’s interim CEO Andre Godin last Friday. “This is an exciting time for Neptune and we remain focused on strengthening our business, affirming our leadership as an innovator, growing our market presence and enabling a better, healthier way of life in today’s world.”
At press time, shares of Neptune Technologies were up 9.7% to $2.93.