The “Absolute Black” Solar Stock is …

Checking in on the solar pick from Nick Hodge's Early Advantage

By Travis Johnson, Stock Gumshoe, August 3, 2014

Several readers are asking about this one, so we’ll re-feature it here to help answer some questions. We have not looked at this “Black Solar” stock in more than a year, but it has been teased off and on for more than two years and is still the same stock, still very volatile based largely on news releases and attention from newsletters, and still is absolutely tiny and has no revenue or earnings to speak of.

We have not edited or updated the article below, which ran on March 14, 2013. I don’t own the stock or have any intention of buying it, and I did not own it when the article was originally written.

——from 3/14/13——-

There aren’t many newsletter publishers who push microcap stocks with the ardor of Nick Hodge and the Angel Investing folks, so I always end up getting a lot of questions about their picks — particularly for Hodge’s Early Advantage and DeHaemer’s Crisis and Opportunity, but also for Mining Speculator and Power Portfolio and several of their other letters.

But Early Advantage (formerly called Alternative Energy Speculator) focuses a lot more on what they seem to think are “ground floor” opportunities, in stocks that are so small they really have little business being public companies. That’s included picks like DNI Metals (DNI.V DMNKF) with their “Mine of the future”, New Energy Technologies (NENE) with their world-changing solar windows and others (DNI has cratered, NENE is above the initial coverage price but well below the spikes in the years since it was teased, just FYI, though both have clearly reacted much more to coverage like Nick Hodge’s than to any actual fundamental business developments).

And Gumshoe readers have been asking about the “Absolute Black” pick that Nick Hodge has been teasing, so I thought I’d take a quick look for you.

This is not a new teaser pick — but it is priced right around where it was when Hodge started teasing it, back in late June. He drove a lot of attention to the shares over the couple months after he first teased it — we covered it on June 29, initially just for our smaller cadre of Irregulars (we opened the story up to everyone a few weeks later due to heavy interest), and on that date, before we published, it traded at about 80 cents. It spiked on that first flurry of excitement and got to about $1.50 or so within a couple weeks, but then fell back down and gave up most of those gains and gradually drifted back down over the ensuing months, so it’s been bumping up and down between 80 cents and a dollar so far in 2013. I’ve not written about it since, and I don’t own shares.

So yes, it’s still Natcore Technologies (NXT on the Venture exchange in Canada, NTCXF on the pink sheets) that Hodge is teasing with his “Absolute Black” pitch. His ad is almost identical to the one I covered about nine months ago, I think the only difference now is that he’s hinting at a future $21 a share instead of the $11 he teased before … and the company has made some progress, incremental though it might appear, in developing their business since last Summer.

Natcore is a company that’s developing liquid deposition technologies that allow them to more cheaply and efficiently make solar panels or other thin film products — at least in the lab. They call it Liquid Phase Deposition, and that’s a different basic technology than the chemical vapor deposition that’s typically used for nanoscale layering of materials, and apparently they are able to get both a more light-absorbent black silicon (that’s the “absolute black”) and, separately, a dual layer (tandem) solar cell that captures more sunlight by having a second layer of quantum dots of silicon to absorb additional energy.

They think that the tandem solar cells are what have the greatest potential to really change the world by dramatically improving efficiency, but the “absolute black” coating for solar cells would also have an impact and that black silicon advancement (licensed from the national renewable energy lab, which is their partner on this project — NREL invented black silicon, liquid deposition from Natcore got it to be manufacturable) is much closer to potential commercial production. They’ve been testing it, have managed to build a cell using a scalable process, and are pushing to get a commercial-scale manufacturing process developed this year with a Chinese partner — here’s how they put it in the latest President’s Message from a few months back:

“For the first half of 2013, our “to do” list includes these goals:
· Hire additional scientists and technicians.
· Produce a solar panel from black silicon cells made in our own lab.
· Complete a second-generation AR-Box™. This solar cell processing station will be designed to produce black silicon solar cell wafers in a pilot line role in existing solar cell manufacturing facilities. Pending a successful testing outcome, we then hope to sell the machine to a Chinese cell manufacturer who has been sending us their cells to coat, test and optimize. As soon as we can put AR-Box into manufacturers’ hands we can turn on the faucets of chemical sales and royalty revenues, which will be our primary sources of income.
We have moved black silicon higher on our work schedule because we see it as our most immediate source of revenue. But we certainly haven’t forgotten our other technologies.”

That “chemical sales and royalty revenues” is really the key — Natcore has a financial guy in charge, Chuck Provini (formerly a higher-up in for a few asset management companies, including Ladenburg Thalman), and an investment analyst and newsletter publisher as Chairman (Brien Lundin), so they started off pretty early with a focus on a feasible business plan … and, not coincidentally, one that would appeal to investors.

Their goal is to develop a process based on their proprietary formulations for liquid phase deposition, which is a chemical bath process that’s less environmentally scary and less expensive than chemical vapor deposition, and to both earn royalties and sell the supplies that companies need to use the process. So revenue, other than occasional contract research or similar deals, probably won’t really hit their books until the process gets commercialized — but if you want to be optimistic and assume that the black silicon process does get commercialized and achieve a pretty high level of acceptance, with significant scale, then it’s quite possible that they could ramp up to very significant profits fairly quickly once that happens. It doesn’t take a lot of revenues to be really significiant if your market cap is $35 million.

Of course, this is really a venture stage research company hidden inside a publicly traded penny stock, so the chances of loss and failure are high and eventual dilution by additional equity raises is all but certain — though dilution doesn’t seem terribly painful when there isn’t any kind of base of sales or profits (or even projected sales) that is being split more ways, it’s just blue-sky potential being divided among more shareholders.

It’s also likely to be risky that we’re talking about what is essentially intellectual property in a business where most large-scale manufacturing takes place in China — so if black silicon is as successful as they think, and their cheaper and more environmentally-friendly liquid deposition process is really better than the current standard, will Natcore be able to keep hold of that process when it’s in the hands of Chinese manufacturing companies? If it gets to the point where they’re contemplating commercial production, which would mean they’re doing quite well, that might become an issue — but getting that far would be a bit of a victory in itself so it might be a nice problem to have to consider. I don’t personally have any idea how copy-able the process or materials might be.

I won’t go into further detail about Hodge’s blue sky predictions for the stock — I covered that in more detail in my article last year, and the promise and potential (and the ad) is pretty much the same now as it was then. Natcore is likely to be news-driven and volatile this year — they have contracted with a California company to develop a solar cell processing station that could be built into an existing factory as a pilot, using the black silicon technology, so if they can sell that and generate some initial materials sales and royalties that would certainly get folks interested and provide some kind of model of valuing future deals. For a company this small, even that relatively small step of one machine sold could potentially cause a big jump in the share price. That particular machine is being built in the US, supposed to be completed very soon (they said the first quarter), and the manufacturer of the machine has been licensed to build and distribute more of them if there’s demand. I’d guess that’s the next thing most likely to catch any investor enthusiasm, but that’s just a wild guess — and, of course, any bit of bad news, like a delay or a lack of interest in the “absolute black” AR-BOX machine among solar cell manufacturers, would probably bring the value of the company down.

As with any microcap stock, Natcore can easily move rapidly on any news — or on no news. The average volume of trading in the shares is only about $25,000 a day, which means they’re quite susceptible both to overreaction and to manipulation, and there is no institutional ownership or analyst coverage to provide a baseline for valuation or expectations. I am definitely not an expert on solar cell manufacturing, but the technologies they’ve licensed do at least sound interesting and useful, and if they’re inexpensive enough and efficient enough to improve the current standard solar cells then there’s always some potential. I like that they start out with a scalable business model and some financially minded guys in charge, but that’s certainly no guarantee that the commercial adoption of their technology by any of the big solar cell manufacturers will be smooth, easy or even possible — when you’re dealing with a tiny venture-stage company whose work is still focused in the lab, and a firm that would potentially competing in a large global industry, it’s always wise to be cautious. I’ve never owned the stock and don’t intend to trade it, but I’m sure I’ll keep half an eye on them and see how things progress this year — in no small part because I’m sure Nick Hodge will be reminding us all via email if the stock moves the way he hopes.

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Share Your Thoughts

ShowHide Comments (32)
    1. Nate Calhoun
      Mar 14 2013, 03:49:41 pm

      BSRC (biosolar) is another tiny development stage company trying to crack into solar with a new twist. They at least got their first material order the other day and have a lower buy price now than NTCXF and have sported a much higher valuation.

      I owned BSRC at all the wrong times, sold it slightly above where it is now and may get interested again if it turns out they really have a semi-govn purchaser. And I bought into NTCXF low enough that any upside is good. I just mention BSRC since it seems to be a similar thing, with similar hype cycles to NTCXF but perhaps a better bet for those getting tempted by NTCXF, which seems to just bounce around between $0.80 and $1.01 on silly news items like “new scientist on our board!”

    2. Matt Elwell
      Mar 14 2013, 03:54:02 pm

      I got this email quite a while ago. I have a brother in solar who confirmed their patents and thinks the technology looks great. He’s in solar, not investing. I bought a couple hundred shares, but this is really just a gamble, not an investment. In solar, the technology has to be “bankable” for anyone to use it…meaning banks will write a loan on the projects. This is not yet bankable. If and when it is, that’s when I’ll see my payday. if it doesn’t reach that point, I can kiss that .02% of my portfolio goodbye.

    3. Andy J
      Mar 14 2013, 04:12:10 pm

      I just recently unsubscribed to Nickie’s letter and still hold some of his under water pitched stocks… never made a penny on any of them… draw your own conclusions…

    4. John McNeil
      Mar 14 2013, 04:48:54 pm

      A company has a $100 million mining project. It also has but $ 10 million in the bank The guys at Angel [ or is it Agora ? ] never discuss where the $ 90 million is going to come from. They may know something about mining and minerals but they don’t seem to know much about finance . Northern Graphite is a case in point.

    5. Myron Martin
      Myron Martin
      Mar 14 2013, 05:23:12 pm

      I think the biggest danger from these highly hyped penny stocks is that inexperienced investors will get carried away by the rhetoric and invest far to big a percentage of their investment capital in the hopes of making a killing and end up disappointed because it takes far too long to play out and sell out at a loss. SPECULATION is far different from investment, and depending on risk tolerance and size of portfolio most people should probably limit their investment in such speculative penny stocks to no more than 5% of their capital and only 1% to any individual stock and then only if they can tolerate the occasional inevitable loss.

      Buying a few hundred shares on dips to facilitate tracking allows you to add on the way up when company progress justifies adding to your position, just realize that most such stocks showing early promise can take years to develop to a profitable position. I am in a simiiar position to Matt, it only takes one major hit to pay for a few small losers.

    6. 15
      Wayne Hatcher
      Mar 14 2013, 05:30:29 pm

      I got this teas back late May or early June 2012. As far as I could tell at that time, they are not interested in anything beyond developing an application machine and the process. Then they will sell the machines and license the process for a percentage from the actual manufacturer. Also they will apparently be the only source of chemicals which will obligate the manufacturer in to doing business with them and paying their price. Not a bad deal huh? One catch. The only manufacturer they have prospects with as far as I can tell is in China which means they are dealing with the Chinese government. How many times have the Chinese stolen technology from American companies? If China is the main customer, I will definitely not be an investor. If anyone else is or does. Don’t cry when the company ends up in court trying to enforce their license agreement and fighting a knock off company. They are the kings of cheap knockoff.

    7. proudgrampa
      Mar 14 2013, 06:48:14 pm

      I wouldn’t touch a solar energy company of any kind.
      Solar energy has a few downsides. They are:
      1. Night
      2. Clouds
      3. Storms
      4. Smog
      5. Fog

      ‘Nuff said.

      • Slick Rick
        Aug 3 2013, 09:34:40 am

        There was recently a “Power Black Out” in my town……Solar panels were installed at the local high school , municipal building, and many other places around town……Did they help with the black out? ……answer NO they were about as useful as tits on a bull. To make matters worse ……my real estate taxes went UP! Apparently some people are making money on this solar scam, and the rest of the public is getting goosed!

        • Myron Martin
          Myron Martin
          Aug 3 2013, 06:33:42 pm

          There have been lots of scams and failures in the solar energy field, but the sun is still shining and as in other fields of endeavour, new technology continues to be developed. I fail to see where “slick ricks” comments are relevant to the viability of Natcore’s Technology, since it is not yet in commercial use, so the solar panels that Rick slams as a failure may just be part of the learning or development curve. The real issue that will make solar power more viable is vanadium based storage batteries, which like Natcore’s technology is still in the development phase. There have (and probably always will be) cynics who do not believe some new or proposed invention will be useful or practical.
          If I recall my history, plenty of cynics were doubtful of the success of airplanes, horseless carriages or even railroads, or even more recently the usefulness of computers in private homes, but look how far we have come economically since these inventions.

    8. Larry H.
      Mar 14 2013, 06:53:58 pm

      Iwas very impressed to find out they not only mack to absolute black but now have a patent on a tamden collector increases the solar cell efficiency to 30% or more (standard cells are about 17% efficient), tandem solar cells can nearly double solar cell power output. This wwill make solar cheaper than buying it off the grid. They also aremaking the coating into small mulicular bubbles increasing the surface area and the area which gets direct sunlight. Very impressive if you ask me. Six more months and they will be rolling off the assembly line.

      • 15
        Wayne Hatcher
        Mar 14 2013, 08:34:20 pm

        I could swear that it was touted as being more efficient than 30% when I received the first tease. But even if it’s 60% efficient I have one word………CHINA!!! They will most likely loose to rip off of technology and the Chinese wont care if they can’t sell it in the U.S.. They will have the rest of the world that is as equally hungry for cheap alternative energy as anybody is, including Americans. I wouldn’t touch this company with a ten foot pole if they have to outsource to China to get off the ground.

    9. razubel
      Mar 14 2013, 09:01:34 pm

      I bought NENE back in March 2012. Made 30% in a week. Didn’t sell them, now I’m loosing 75%. Unfortunately it wasn’t just once I “got carried away” as Myron says. But the story is always the same, make some money the first few days, never get to sell on time and ended with huge losses.
      IMHO Pitched Penny Stocks are are a good business only for the newsletter’s editor.

      And just when you think you’ve learned your lessons, Travis (who for some reason I fully trust his judgement) brings this here. How much can I make????

      • 3984 |
        Travis Johnson, Stock Gumshoe
        Mar 14 2013, 10:29:06 pm

        Some lessons we have to learn several times — and then we make a big windfall due to luck or good fortune and we have to start back at the beginning with more lessons to learn … Which becomes tougher if hubris tells us that our good luck was actually prescience.

        Thanks for the trust, I never try to turn anyone the wrong way … But I sure do make plenty plenty plenty of mistakes. The key, I think, is giving your inner gambler a short leash.

        • Meg in Minneapolis
          Mar 16 2013, 08:25:37 am

          Stock Gumshoe….I have copied your words of wisdom, and posted them next to my desk. Yes, one bit of luck with a hyped stock has sucked me into trying out others, for yet another lesson that I never quite learned. So I need to learn the lesson more than several times!

    10. ET
      Mar 15 2013, 03:38:46 am

      This NENE stuff is like drugs. You read it so much you just can’t resist buying the stuff. You know its bad , you know you can invest in so many other more reasonable companies and yet here we are, at the “pushermans” door. so you give in to your addictions…the key is just to buy a few stocks so you can watch it tank but not actually be seriously injured by investing too much.Sort of like give the patient morphine so they can get off heroin. Oh how we need the fix of hope for a 10 bagger!

    11. ET
      Mar 15 2013, 03:48:44 am

      Thank the gods I got lucky on a couple of long shots way back when, as they covered most of my losses on the other losers. I eventually just sold it all to pay off my student loans…now that was a GOOD move. That did pay off in the long run. I am free lord ,Lord I am free of debt!
      Hey Travis I did keep 1 loser stock ( Feronia) in the Congo. Down 80% at one point – just to remind me of the folly of the penny stocks. recently it went up…I am only down 77 % now…we are on the verge off a bull run on Palm oil! 🙂

    12. Kirk Spano
      Mar 16 2013, 11:39:53 pm

      If you want solar, concentrate on EPC companies – Engineering, Procurement and Construction. Panels will be commoditized for a long time, maybe forever. Even breakthroughs are incremental, not transformational. I like WFR, FSLR and SPWR on dips. Selling $4 puts on WFR when it’s below $5 is a good trade. Right now can get about .40 v $4 potential buy price. Happy to buy shares at net cost of $3.60.

      I sold covered calls (July $6) recently when the stock popped. Huge growth rates, slowly emerging competition after a big few (FSLR, SPWR), improving balance sheet, insider buying.

    13. Stephen Brubaker Stephen Brubaker
      Mar 18 2013, 03:56:30 pm

      The infomercial displays a rather profound disregard for the proper accounting of light energy. Current coatings reflect less than ten percent of light at sharp angles, somewhat more light at shallow angles. Absolute black stands to improve solar performance only marginally at shallow angle incidence. It may improve absorption at low angles enough to improve conversion efficiency maybe fifteen percent: i.e. improving solar conversion from 14 percent to 16 percent. That’s worth something; but it’s not going to revolutionize the business.

      I think Kirk Spano is correct that it won’t be long before the panels are viewed and priced as commodities, meaning there is limited upside potential for the panel business.

    14. Rob
      Mar 20 2013, 02:00:12 pm

      It`s true what you wrote, however, I was successful with Nick`s picks or pumps. By no means they`re investments, you buy and dump.

    15. Gary
      Apr 12 2013, 12:53:29 am

      This is not some hype penny stock. I’ve followed it for a long time. Basically an applied research type company and slowly it has been coming together. In general the solar industry moves extremely slow, usable advances are few.

      The whole Nick Hodge thing has been a mess. Basically he stumbled on to a tech company with great potential and attempts to do his typical pump job. Distorts the real picture a lot. Nick would not know a real good company if he tripped over it a dark alley.

      Lot of good people associated with the company and more coming. They have been hiring and growing. They have the talent for a bunch of break thru’s. Not everything being worked on is known, even by those who have followed it very closely. Latest news is a bit intriging. Expanding their space by a bunch, you guess why? If they have a solution for this connection thing can be super big. There are losses in how various cells get interconnected in panels, they may be able to solve a bunch of things and roll it all into a useable system.

      Some real biggy things potentially could be relatively close to a prototype too. If you solve some of the basic road blocks, lots of other things start to open up. This is not an ivory tower approach where they have discovery every week. This is how to improve the panels in a very fundamental way.

      Not some scam or hype, peeps like the poor fellow Nick may have tried to use them but I would ignore it all. Try to understand what they are doing. The black solar stuff is one possible solution to not have to track the sun, incident angle problem. This latest thing is about internal losses and how to allow the cell to have more current flow than before. Lots of quite technical stuff involved.

      They have no problems raising money, the backers understand what is at stake. Willing to make the bet. Chuck Provini is a very smart guy. He has a sort of mission and has invested a good chunk of his life in the effort. Served in the Nam, very ethical guy.

      I still think they will pull it off. Would not be surprised to find some very large companies are into some agreement that they don’t announce. Type of stuff GE really needs if they want to be in the solar game big time. Too many very knowledge folks and other companies and agencies have had a good look at what they are doing. Very difficult to solve but they are getting there. And yeah they know not to trust the Chinese.

      • Gary
        Apr 12 2013, 01:09:17 am

        In addition to the above I did also receive this info in an email from Chuck. Tough to figure out what exactly he has in mind. Maybe they are actually going to manufacture cells in Rochester for some client. Or it could be many other approaches. I have all along expected them to have the ability to fully produce prototype panels in house. In a way I expect Chuck to want to hook up with a larger USA based company first, probably one already in manufacture. Various names float about.

        “Below is a press release that was disseminated today. Although the press release speaks for itself and goes into some detail about the progress we are making in Rochester, I feel the underlying theme is important. What we have accomplished in Rochester is to assemble the equipment, as well as the intellectual skill sets, to build full size solar cells ourselves without relying on outside universities or organizations. This has allowed us to move much faster towards commercialization as we can be more focused on very specific research goals.

        The addition of Drs. Carlson and Margadonna to our advisory board have given us greater depth and experience with respect to how our technology can and will be integrated into manufacturing facilities. The underlying theme is that we are moving out of the laboratory and into the factory very soon.

        If you have any thoughts or comments, I would be anxious to hear them.


        Charles R. Provini

        President & CEO”

    16. Guy Jackson
      Jan 19 2014, 01:30:19 pm

      What’s the latest? NH has just punted it again. I agree with the guy who says that batteries are the key to alt energy. What hapenned to CoorsTek’s hyped chemical battery a few years ago?

    17. 30 |
      Apr 7 2014, 05:17:53 pm

      I found Natcore about 6 months ago while being pumped on SA. I bought it. Mainly because much of the info was being blocked when pumped. When it became available again, I dumped it ASAP!
      1st. Natcore could not get any support (funding) from the US or investors. So in 2010 they made this big statement and press release showing the ceo actually signing a contract with China. Then all news goes blank, nothing. If they signed a contract in 2010, then for what? Now all of a sudden they add a laser scientist, which should have been done BEFORE they signed anything with the Chinese. 4 yrs later, after they should have announced progress with the supposed US co. they add a scientist?? BS. The tech either does not perform as stated, or they’re still pedeling a theory not yet proven. This thing has a huge way to go before any real catalysts occure.
      2nd. The tech is 30% more efficient in the manufacturing process only. Other co’s like Soitec and a few big names have better, more efficient tech.
      I personally feel this co is a fraud and will eventually crash and burn.

    18. 30 |
      Apr 8 2014, 02:53:09 pm

      Frankly, if one wishes to throw their money to the wind (speculation stocks) their are plenty of others with better fundamentals;

    19. Slick Rick
      Jul 14 2014, 11:51:28 am

      Folks remember the SUN has a finite life span before it collapses into a dwarf star. We are currently Half Way through its 10 BILLION year life span ……..LONG TERM Investors beware LOL!

    20. Nick Mast
      Sep 3 2014, 01:13:34 pm

      I like Oil and Wood and natural Gas, LOL purchase some stock in those commodity markets and you will do better then in Solar, at least for the next 5 year LOL

      Self geneated gas from cellulious and the like can be made at home from home waste and easy to get waste from the environment. Storage can be below grade pressurized and place there with an explosion proof gas pump. The system works and provides gas free, except for the work and the investment in equipment. Gas can be made from your own sewer waste, lawn grass or field weeds, animal manure, or the like. Easy and simple and wrks

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