ARR is a small-cap renewable energy royalty company and is now trading at 1.0x times' Price/Book. The company does not have any operating activities to generate meaningful revenue yet. The assets are its holdings in royalties and investment in renewable energy projects. The balance sheet is strong, with a net cash of $41M. The company is still issuing shares to purchase royalties assets and investments since going public in 2021. ARR has not paid any dividends yet. We like the royalty assets, though we would like the company better once it stops issuing shares to pursue growth and starts collecting cash flow. We consider the name to be volatile, we would be okay to wait and enter later until the company reduces issuing shares. With its small size and possible share overhang from ALS, it is hard to endorse it strongly just yet. But we think as it builds out its portfolio it will be of more interest in a year or two. The royalty space is pretty thin, and we would still be more comfortable with an operating company such as BEPC or BLX if one wants a more aggressive pick.
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