Please give your thoughts on this as well as providing other renewables you might prefer.
Also, I am interested in your thoughts on Telesat. Would you kindly express your thought on this too.
Thanks
LCFS is a small-cap company that engages in the production of renewable fuel in North America. The company has been on solid momentum recently due to a meaningful pickup in revenue and earnings. With that said, the trend in revenue growth is highly cyclical and unpredictable. Consensus estimates expect LCFS to grow its topline by more than 50% in FY2026, and it is trading at 8.1x forward P/E. However, there is limited visibility into the future after FY2026. In addition, the debt level for LCFS is quite high for a cyclical company. Overall, good momentum with an interesting opportunity, but it is illiquid and the debt is high, which investors need to monitor. We are comfortable owning it, but only as a starting, small, and conservative position. Some of its peer companies include BDCO and AMTX.
TSAT is one of Canada's largest satellite operators, providing mission-critical connectivity services globally through its geostationary fleet. The company recently secured a strategic partnership with the Government of Canada and MDA Space (MDA) to deliver next-generation Arctic military satellite communications, directly positioning it as a key beneficiary of Canada's accelerating defense spending commitments. We think TSAT has decent momentum given the strengthening defense-driven catalysts.