SEP.24 Trans-Pacific Dynamic Equity Allocation Research Report

Thank you for accessing the SEP.24 TPDEARR Squad! Please use the analysis in this report wisely and in conjunction with the SEP.24 TPDEARR Articles.

Investing is inherently risky.

Only you can fully understand your timeline, your risk tolerance, and your goals.

Now please, go get rich and be free.

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SEP.24 Squad

The following equity assets make up the SEP.24 Squad for the SEP.24 TPDEARR issue:

1. ClearVue Technologies Limited- (OTC:CVUEF)
2. Grupo Traxión, S.A.B. de C.V. – (BMV:TRAXIONA-in US:GRPOF)
3. GAN Limited – (NASDAQ:GAN)

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Strategy and Future Disposition of SEP.24 Squad

The SEP.24 Squad is a collection of equity assets suggested as a micro-portfolio for investors for an intermediate-term investing horizon of 3-6 quarters. Investors who take up positions in the SEP.24 Squad by purchasing equity shares on the open market can look to hold their positions until around Q3 2025 – Q1 2026, before realizing their gains and recognizing a lower, long-term capital gains taxation. Strategizing how to deposition each Squad is an important aspect of realizing gains and calculating the proper taxation and profit. Investors are highly encouraged to coordinate the timing of sale of equity assets in a Squad with the timelines of other Squads that they may deploy, in order to ensure a consistency of realizable equity revenue, as well as to minimize unnecessary taxation on capital gains. Further analysis for the SEP.24 research report is distributed across the SEP.24 articles on this website. We find that this collection of equity assets in the SEP.24 Squad represents a potential micro-portfolio of highly enticing investments with independently substantiated geopolitical and macroeconomic evidence.

Investors should consult with their financial advisor before allocating capital.

Taking positions allocating USD$100,000 across these assets in proportion to individual measures of risk tolerance, and sufficient diversification efforts, puts an investor in a strong position to realize returns over the intermediate-term horizon of 12-18 months. The assets are selected specifically for this timeframe in order to maximize both the tax benefits of longer-term holding, as well as the sanity of the investor. A longer holding period nullifies the impact of daily volatility and allows broader market impacts and trends to hold greater relevance in asset selection.

The research and analysis in this issue are provided to you in order to contribute to a more comprehensive understanding of the myriad economic, geographic, and environmental factors involved in investments in the trans-Pacific economy. Please read all of the free SEP.24 articles to engage with the breadth of all information being analyzed this quarter. Each asset is further detailed below:

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1. ClearVue Technologies Limited- (ASX:CVUEF)

ClearVue Technologies Limited is an Australian-headquartered sustainable energy company and one of the last solar-based pure-plays in the renewables market down under. After the massive Japanese electrical utility provider J-Power just finalized its acquisition of one of Australia’s last domestic solar energy firms, Genex Power Limited, the market is now very saturated by other Asia-headquartered market players. ClearVue is a remaining holdout and promising enterprise pioneering revolutionary solar/PV glass to decarbonize buildings and bolster the new sustainable energy regime in Australia. The windows are the energy source, and flexibility in glass manufacturing is broad—this is essentially a limitless market opportunity.

Earlier this year, ClearVue finalized a deal with Victoria-based MS Glass to ramp up production of ClearVue’s tech and the firm has proceeded to rollout the technology throughout the country. Numerous projects were subsequently announced, including commercial projects in Victoria and Perth, after being certified for fire-safety in tall high rises in February cleared the way for incorporation into much larger projects. The proprietary glass tech meshes right into the current electrical grid configuration upon installation, so substantial new infrastructural enhancements are not necessary for broader incorporation as the supply offerings expand.

Comparing a company’s financial metrics at different stages of maturity can be a misleading effort, as R&D and exploration have fundamentally different financial and cash flow effects on a company’s balance sheet. ClearVue has only been public for a few years and its share price has yet to rise above $1, showing that it’s not yet attracted substantial retail investor interest. The ensuing 18 months post-ramp-up will be quite unlike the preceding few years of testing and experimentation. As global interest in sustainable alternatives continues to climb, ClearVue’s proliferating technology will start to generate greater interest from parties abroad and overall awareness of the firm and its public equity will become more mainstream, likely providing a higher base level of trading activity as well.

The largest drawback we can gauge in ClearVue is that its executive structure is virtually all male and White, which may present some hurdles and blind spots from a serious lack of diversity and perspective in its views. Nevertheless, this is specifically a technology-hardware company and the innovations presented by the firm are no doubt critical for achieving global human ambitions of decarbonization and energy sustainability. The company is at the forefront of its major commercial rollout, and the time to buy is now.

Significant interest in the AU solar energy market, as we discuss in this issue’s Natural Elements article, and notably by large Asian corporations, ensure that exploration and innovation will continue to abound throughout Australia and its sun-soaked hinterlands, frequently paid for by foreign funds. As Australia and Australians benefit from the decarbonization of their electric grid by mostly foreign technology products, domestic companies like ClearVue will hold special prominence in the foci of residents and regional governments. Local service providers will also have an important place in navigating the connection and distribution of sustainably-generated electric utility products from abroad as they deploy across the grid, enabling beneficial international cooperation among partners.

In sum, the prospects of tapping into (free!!) solar resources across Australia is a growing and profitable endeavor, and the ramifications of significant strides in the AU solar market will have resounding beneficial ripple effects on other global economies. ClearVue is a well-positioned firm for capitalist success in the solar revolution and a great pick for the SEP.24 TPDEARR Squad.

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2. Grupo Traxión, S.A.B. de C.V. – (BMV:TRAXIONA – in US:GRPOF)

Grupo Traxión, S.A.B. de C.V. (BMV:TRAXIONA-in US:GRPOF) is arguably the leading mobility and logistics company in Mexico and in prime position to capitalize off of growing nearshoring operations and manufacturing and industrial expansion across the country.

Traxión’s business covers three primary divisions, mobility of cargo, logistics and technology, and mobility of personnel, with a fleet of >10,000 power vehicles, 10+ nationally recognized brands, and >800k sq. m. of 3PL warehouse capacity to accommodate an even wider range of logistical services for customers. Mexico continues to expand its import/export relationships on the world stage, welcoming increases in manufacturing operations to its shores (via “nearshoring” efforts, both from firms wishing to be less China-centric, and Chinese firms wishing to retain and strengthen access to the North American markets) and pushing forward with the Interoceanic Corridor Project to connect the Pacific and Atlantic Oceans and their ports and cargo throughputs across the Isthmus of Tehuantepec by rail/intermodal means, Traxión is strategically positioned not to just to facilitate increases in cargo traffic, but to grow along with it.

With more than 1,000 long-term business clients and growing, Traxión is proving itself a mold-breaker in that it’s the only consolidating and institutionally-owned competitor in a highly fragmented market of family-owned players. Fragmentation in the market represents an opportunity for successful firms to expand and gobble up market share through strategic acquisitions; Traxión has “a robust pipeline” of potential acquisitions, and the firm will continue to make smart buys supporting its “asset-light” approach to steering through digitally-optimized and technology-driven sector evolution with less-capital-intensive investment outlays.

Another point of note herein pertains to the Maquiladora Program throughout Mexico. Maquiladoras are manufacturing operations which are specifically setup to process raw goods for export. These operations are typically sited near the US-Mexico border, have special tax and commercial classifications to attract in foreign firms and investments, and have been instrumental and helping Mexico’s manufacturing sector evolve. Originally implemented via Article 104 of the Mexican Customs Law in the 1960s to help bridge economic disparities between the US and Mexico, the tax-free manufacturing opportunity continues to be highly attractive in the current trans-Pacific geopolitical environment, especially to international firms looking to move operations to Mexico to trim costs associated primarily with the transit of goods. Traxión continues to benefit from its role supporting current and new Maquiladoras, and the intermediate-term timeframe sees numerous expansions to the possible benefits from this arrangement.

Traxión’s share price has depressed over the past half year or so, even while its revenue growth and EPS growth are dominating its rivals and industry benchmarks, all of which has helped sink its Price-to-Sales multiple to a very attractive level. Without wading into the morass of ridiculous forecasting (guessing), it’s still safe to say that the growth potential from the background supply/demand economics are very strong in the near and intermediate term, as long as Latin American migrant issues are not overly disruptive, as they were occasionally last year.

One final thought about Traxión concerns the carbon-intensive nature of logistics operations. Traxión is primarily a diesel-powered company, currently, though trends are shifting. Reporting on carbon-intensive metrics for logistics companies is typically painful for company optics, but Traxión continues to improve its transparency and sustainability goals, increasing its accountability to stakeholders and the broader public even while it’s not yet a carbon-neutral firm. Along with moderate increases in the total % of female participation and minority representation in its workforce, Traxión is not shying away from the sometimes-difficult tasks of integrating and globalizing leadership and labor forces with the diverse perspectives necessary to stay competitive and thrive in ever-changing markets dynamics. As investors, we applaud this effort and transparency.

We will continue to look to Traxión’s use of its strong logistics support to enhance cross-border trade and entrench the next class of advanced manufacturing on Mexican shores. The company is a great addition to the SEP.24 Squad.

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3. GAN Limited – (NASDAQ:GAN)

GAN is a Software-as-a-Service company offering commercial gaming solutions to many different markets globally, selected here for its substantial position in the US market with its blossoming gambling-friendly legislation. Sports betting, in particular, is seeing tremendous customer interest with millions of players using GAN’s award-winning software GameSTACK™ to place bets throughout North America daily (GAN’s subsidiary Coolbet also launched in Mexico in 2023). The platform facilitates brick-and-mortar casino gaming, sports book betting, and play-for-fun as well as real money iGaming, tapping into each distinct revenue pillar of commercial gaming.

Launching out of Irvine, California in 1999, GAN is currently in a novel phase of growth following the 2018 Supreme Court verdict striking down the prohibition of online sports betting as unconstitutional. GAN’s software is turnkey, allowing new firms to open up gaming operations online throughout the US with management-friendly digital platforms that streamline operations and cushion the experience for an increasingly global userbase. Customers already familiar with activities like online poker and digital gaming continue help drive innovation and development of the platform, keeping the service competitive against other market players. GAN specializes in first-to-market deployments, helping new customers navigate tricky regulatory environments to get their real money gaming services up and running as quickly as possible. This approach helps them cement-in market share as new jurisdictions unfurl legislation welcoming in commercial gaming firms to a blossoming sector.

The firm’s market value is small compared to many other major global competitors around whom the industry had previously consolidated in decades prior. When sports betting, for example, wasn’t legal in most US states, there were no opportunities for new firms, and the industry stagnated around the legacy casino companies and overseas behemoths like Churchill Downs. Now, overall market growth is opening up profitability opportunities for many different kinds of firms, and GAN is a leading contender on this front. A <$2 share price makes GAN an attractive bet in consideration of the enormity of the growth potential, and investors should understand that volatility in such a low-priced stock is not easily comparable to relatively-more-subdued volatility from larger legacy players. This is a shifting market environment, and GAN’s asset-light approach is key for expanding market share while keeping costs down and administration lean. Market dynamics are more instructive of economic potential than share price when the latter is orders of magnitude removed from its competitors.

GAN has a substantial portion of its revenue incoming from fees, some of which provide minimum monthly revenue guarantees, so the firm is not only beholden to uncertainties associated with other metrics tied to its offerings, such as net sportsbook winning percentages. B2B and B2C processes continually complement each other for GAN, helping to pull its net cash flows from operating activities into positive territory in Q2 of this year (according to its recent 10-Q filing).

GAN is also in the process of closing a merger with the Japanese conglomerate Sega Sammy Holdings Inc., which will give it an enormous new foundation in arcade and in-home video gaming markets, as well as the previously-untapped pachinko market, both of which can be instrumental in driving the firm to proliferate further throughout the Asian economies.

As new US states continue to expand their offerings of legal commercial gaming following the Supreme Court ruling, we find GAN a compelling contender for inclusion in the SEP.24 TPDEARR Squad.

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