Clarus likes nanotechnology

You know that the capital markets have taken an interest in tech plays when an investment dealer takes the time to publich research on a nanotechnology firm. Here’s a summary of the Clarus Securities research report on Quebec-based Raymor Industries (RAR:TSXV). Raymor has a market cap. of $95 million and is still pre-revenue.

“Raymor Industries operates in the emerging field of nanotechnology. Nanotechnology derives its power from transformations that occur when technology is developed at the molecular level (‘nano’ represents one billionth of a unit of measurement). Matter can be manipulated at the molecular level to exhibit desired characteristics such as greater strength, improved thermal conductivity and lighter weight. This is creating a new world of applications, especially in advanced materials. Raymor Industries is one of only a handful of Canadian companies that fit into this new world! While we do not have a recommendation, price target or earnings estimates, we believe this discussion should provide a good synopsis of the Company and its primary business segment.

Raymor Industries is a developer of technology for the production of single-walled carbon nanotubes, nanomaterials and other advanced materials for high value-added applications. The Company mainly operates in two key areas:

1. The Nanotechnology business. This division is related to the production of Single-Walled Carbon Nanotubes (C-SWNT) using a unique, patented, plasma-based technology.

2. The Metallic Powder and Thermal Spray Coatings businesses. The Company produces metallic powders such as titanium powder for use in aerospace and biomedical applications and Thermal Spray Coatings that serve as protective and/or restorative functional coatings that improve resistance to corrosion, wear, heat and abrasion.

While its technologies can be applied in many markets, the Company is focusing on the aerospace and biomedical sectors. With respect to the single-walled carbon nanotubes, the market is predicted to grow rapidly, with some estimates that it will be worth nearly $100 million by 2009 and reach $6.8 billion by 2020. The Company claims that once economies of scale are reached, its technology will enable it to produce high quality C-SWNT at a significantly lower cost than competitors.

The Company is producing metallic powder and has received multiple orders from Stryker, one of the largest orthopedic companies in the US. We believe these orders provide strong validation for the Company’s titanium powders. With regard to thermal spray coatings, the Company recently formed a special subsidiary to focus on the aerospace sector by providing coating services for the landing gear market.”

MRM