Our small-cap pick for the day is a renewable energy and sustainable lifestyle company specializing in environmentally friendly energy efficiency and healthy living solutions – SinglePoint Inc. (OTCQB:SING). The company has a diversified set of businesses ranging from renewable energy to air purification and is expanding its portfolio by acquiring undervalued companies through horizontal market acquisitions, resulting in a rich, diversified holding base. Today, we are going to give a broad overview of the company’s operations and focus on two key subsidiaries which could be major growth drivers in the coming years.
What Does SinglePoint Do?
SinglePoint focuses on offering renewable energy solutions and energy-efficient indoor air quality improving appliances in the U.S. It provides solar and air purification services and solar installation and financing. The company’s offering leads with two major industries– renewable energy starting with solar panels and indoor air quality improvements through subsidiary BOX Pure Air. Its renewable energy offerings include residential and commercial solar installation that can be paired with EV Charging and Energy Storage, as well as other energy efficiencies and appliances that improve sustainability and lead to a healthier life. These areas are where the company is actively looking for future growth opportunities through acquisition. The company is based in Phoenix, Arizona, and was founded in 2007.
Renewable Energy Solutions
Boston Solar LLC, a highly respected solar installation company in New England, was just acquired by SinglePoint. With revenue of $17.8 Million in 2021 and projected revenue of over $25 Million in 2022, Boston Solar significantly increases SinglePoint’s solar energy revenue base even before the pending acquisition of Frontline Power Solutions.
Direct Solar America is another piece of a powerful combination of assets including SinglePoint subsidiaries Energy Wyze and the aforementioned Boston Solar. Direct Solar America, a subsidiary of SinglePoint Inc., has a promising business within the renewables space. Its primary value proposition is to help homeowners and small businesses minimize the hassle with respect to implementing solar energy as a source of power for their respective units and maximize the benefits of solar. The company acts as an effective tool designed to educate and deliver on their promise of a premium customer experience and feed sales leads to SinglePoint’s planned solar installer acquisitions like Boston Solar.
These acquisitions position the company as a fully integrated service provider in the solar market. By realizing the economies of scale, SinglePoint is positioned to increase profitability and realize cost efficiencies across the companies. Direct Solar America’s business model is promising and has proven to be successful. SinglePoint can control the customer experience from lead generation to installation by bringing together various aspects of the solar process under one corporate umbrella, ensuring the best customer experience and unmatched customer service.
According to a research report from Ireland’s University of Cork, the U.S. has enough serviceable rooftop area to deploy a significant amount of solar equivalent to its current nationwide peers levels. In the US alone, over 100 million people would benefit from going solar. The 2020s appear to be the Solar+ decade, with strong tailwinds in the renewable energy sector. Overall, Direct Solar America is well-positioned to be a key player in the solar market as it continues to modernize the solar sales model and build a large and growing network of professional solar panel installers.
The BOX Pure Air Indoor Air Quality Offering
SinglePoint has been focused on acquiring and consolidating high-potential technologies that are sustainable in the long-term. The company went on to acquire BOX Pure Air, LLC in early 2021 with the objective of leveraging BOX Pure Air’s established multi-state exclusive and international rights to sell the Airbox™ technology. Airbox is an industrial grade, made in the US, high-proficiency energy-efficient air purification technology and BOX Pure Air holds the exclusive distribution rights for Airbox through multiple states in the US, and South America. BOX Pure Air’s offerings are designed, manufactured, certified to government standards, and meet the U.S. FDA’s enforcement policy guidelines for air purifiers during the Covid-19 pandemic, as well as Department of Education requirements. Through this acquisition, SinglePoint and BOX Pure Air have been targeting the $121 Billion available to the P-12 schools throughout the nation. The companies have also targeted opportunities where it can push the product to schools and offices working towards returning to normal operations after the coronavirus impact. Considering this already allocated funding, the Company feels comfortable to expect a minimum of $15 Million in 2022 revenue for BOX Pure Air with the potential for significantly more revenue as this funding is distributed and air quality projects are awarded.
BOX Pure Air caters to a large addressable market as research indicates that indoor levels of pollutants can be two to five times higher than outdoor levels (sometimes up to 100 times higher), according to EPA studies of human exposure to air pollutants. Since most people spend about 90% of their time indoors, particularly after the impact of Covid-19, these levels of indoor air pollutants are particularly concerning. School districts are also becoming increasingly interested in improving indoor air quality in areas of the building where social distancing can be difficult to enforce. The Federal government funding is now providing schools the opportunity to purchase high-efficiency portable air purification units with certified HEPA filtration in order to support the health and well-being of students and staff in the country’s schools without impacting their annual budget through the various Elementary and Secondary School Emergency Relief (ESSER) funds of $121 Billion specifically allocated to improve Indoor Air Quality in schools. Again, BOX Pure Air products are eligible for this funding.
As a matter of fact, a North Carolina school district has fully implemented a clean indoor air solution using Airbox Apex, Peak, and Mesa units provided by BOX Pure Air. This is the company’s first large order with a total value of nearly $2 million. These products are of high quality, require little maintenance, are simple to operate and come with a 5-year warranty. This school district has fewer than 25 schools, but SinglePoint is in active discussions with several other individual schools as well as small, medium, and large school districts in North Carolina, Texas and California. The company is well-positioned to capitalize on the rising demand to create clean indoor air environments at school, work, and at home.
Source: TradingView SinglePoint’s stock is currently trading significantly off its 52 week high. One of the key factors responsible is the current macro-economic headwinds in terms of rising interest rates and the geopolitical tensions associated with Russia. The company has a certain conglomerate discount associated with it, given its diversified lines of business, but this discount will most likely disappear as their vertically integrated business plan proves to be rapidly growing and profitable. This gives investors a good opportunity to enter at a low point because we believe that it is only a matter of time before BOX Pure Air, Direct Solar America and the recent acquisition of Boston Solar with its projected $25 Million in revenue in 2022 starts scaling up with a rapidly building orderbook and making an impact on overall market cap. Its current valuation in terms of the enterprise-value-to-revenue multiple is around 5x which is reasonable, but future acquisitions with consolidated financials can quickly change this to be significantly undervalued.. Overall, we believe that SinglePoint has a strong upside in the future and the best is yet to come.