This week, we start by revisiting one of our popular “Case For” Battles from a year ago. The battle, pits two renewable energy companies, Greenlane Renewables Inc. (GRN: TSX) and Xebec Adsorption Inc. (XBC: TSX) in a no-holds-barred cage match. Just like one year ago, Aaron takes the bull base on Xebec, and Ryan crushes him mercilessly with the Bull case for Greenlane. May the best renewable, that Ryan is arguing for, win. Uncle Brennan sits in as judge, jury, and executioner. Our YSOT this week comes from a listener on Jack Nathan Medical Corp. (JNH:TSX-V) – an omnichannel healthcare provider that builds turnkey, barrier-free medical and dental clinics in high-density centers in Canada and internationally. The question is a follow-up to a YSOT from February of this year in which we gave a firm no to buying the company at $0.85. The stock is down over 43% since that time and a listener asks us if there is value in the current range.


Revisiting a “Case For” Battle from a year ago.

Xebec Adsorption Inc. (XBC: TSX)

Current Price: $4.68

Market Cap: $716 million


What does XBC do?

A provider of clean energy solutions for renewable and low carbon gases used in energy, mobility, and industrial applications. The company specializes in deploying a portfolio of proprietary technologies for the distributed production of hydrogen, renewable natural gas, oxygen, and nitrogen.

Xebec Adsorption (XBC)

  1. Xebec is cleantech, a renewable energy company that helps its clients reduce their carbon footprint. The company is focused on environmentally responsible gas generation and deploys a portfolio of proprietary technologies for the distributed production of hydrogen, renewable natural gas, oxygen, and nitrogen.
  2. Revenue growth continues to accelerate. Xebec’s revenue growth was nearly 70% in the first quarter.
  3. The company does have a history of profitability. Earnings were negative in 2020 and will continue to be so in 2021 but analyst consensus is for a breakthrough into a net profit for 2022.
  4. Recently listed on the TSX exchange which opens up new markets of investors and inclusion in key indices and ETFs.
  5. Xebec trades at a valuation of 6 times expected revenue for 2021. The share price has pulled back over the last few months and the valuation is now cheaper than I have ever seen it for this stock. Massive revenue growth, a net cash balance sheet, and a potential transition into profitability in 2022 create a potential opportunity in Xebec.


Greenlane Renewables Inc. (GRN:TSX)

Current Price: $1.60

Market Cap: $222 million.


What does GRN do?

Greenlane provides biogas upgrading systems that are helping decarbonize natural gas. The company’s systems produce clean, low-carbon, and carbon-negative renewable natural gas from organic waste sources including landfills, wastewater treatment plants, dairy farms, and food waste, suitable for either injection into the natural gas grid or for direct use as vehicle fuel.

Greenlane is the only biogas upgrading company offering the three main technologies: waterwash, pressure swing adsorption, and membrane separation. With over 30 years of industry experience, patented proprietary technology, and over 125 biogas upgrading systems sold into 19 countries worldwide, including the world’s largest biogas upgrading facility, Greenlane is inspired by a commitment to helping waste producers, gas utilities, or project developers turn a low-value product into a high-value low-carbon renewable resource.

Case For:

  • Greenlane is in high growth mode producing quarter-over-quarter revenue growth for 5 straight periods – Plus the last two quarters were EBITDA positive.
  • Q1 2021 record revenue of $12.2 million, jumped 317%. Adjusted EBITDA of $0.6 million – again the second consecutive quarter of positive EBITDA.
  • Sales order backlog has grown to $37.7 million and the sales pipeline is massive at over $715 million. Just added another $9.8 million contract last month.
  • The balance sheet is good with $37 million in cash and zero debt.
  • All this versus Xebec which significantly missed its EBITDA Guidance in each of the last 2-years has a history of overpromising and underdelivering, saw its backlog decrease over the last 12 months, has less revenue growth & lost $5.8 million in EBITDA in the last quarter.
  • Not saying I want to buy either, but in a gun-to-the-head choice between the two, Greenlane is a no-brainer.


Your Stock Our Take


Ryan via Youtube 


Jack Nathan Medical Corp. (JNH:TSX-V)

Current Price: $0.53

Market Cap: $43.5 Million


What does the company do?

Jack Nathan Medical Corp. is an omnichannel healthcare provider that builds turnkey, barrier-free medical and dental clinics in high-density centers in Canada and internationally.

Two primary subsidiaries I want to discuss:

  • Under its Jack Nathan Medical Inc. Subsidiary, it licenses its Walmart facilities to primary health care providers as well as allied service practitioners and clinic management groups. JNH currently has 76 clinics across Canada and owns and manages 18 clinics in Mexico – with the commitment by Walmart Canada to open 3 new clinics in 2021/22 and the commitment by Walmart Mexico to open 185 new clinics.
  • Under its Jack Nathan Functional Health subsidiary, which was recently rolled out. In the coming months, the company aims to build and operate corporate-owned and managed healthcare services throughout the JNH network, thereby driving new and increased revenues from each clinic. The company now has 6 corporate-owned clinics.

Key Points:

  • The business has been in Walmart since 2006 and is planning on expanding its operations to Europe, Asia Pacific and Mexico through both organic growth and M&A.
  • JNH launched its telehealth virtual care on March 17th, where they are also promoted on Walmart’s website. And on May 15th, JNH partnered with Prescribe IT – allowing people to get their prescriptions electronically.
  • On June 1st JNH announced the acquisition of a Medical Clinic in British Columbia, which will become the company’s sixth corporate-owned clinic. Jack Nathan Health expects to add high-margin additional service offerings at this location in the future, enabling the company to generate additional streams of income.

Recent Financial Results (2021 Fiscal Year)

  • Revenue was $3.85 million, up over 6% from the 2020 fiscal year.
    • Including all of its locations (both corporate-owned and licensed), it’s producing about $38,500 per clinic, per year.
  • Adjusted EBITDA was down 20% to $209K from $264K for 2020.
    • Very thin adjusted EBITDA margins 5.4% in 2021.
  • Adjusted Earnings were a loss of about $(8K) this year, down from a gain of approximately $153K in 2020.
  • The balance sheet looks healthy with net cash after leases and debt of approximately $7 million.
  • The company has a trailing EV/EBITDA multiple of approximately 174 times which is pricey.


Growth Opportunities going forward?


The company plans to open up new Walmart licenced clinics in Canada and about 185 in Mexico which is great. And it plans to leverage its technology such as (eCommerce with / E-Prescriptions / Patient Scheduling / & at home health care).

Just for fun, let’s speculate that the company can get all of its additional clinics in Mexico and Canada done by the end of 2022. Now if we were to use the revenue per clinic which I mentioned before of approximately $38,500, it would provide the company with just under $12 million in revenue per year. And if we use similar adjusted EBITDA margins of 5-8%, (I will go with 8% to be generous) – that equates to approximately $960,000 in EBITDA per year. Which would give us a forward EV/EBITDA multiple of about 38x which I still believe is pretty expensive on a forward basis.

Please take these estimates as a grain of salt as it doesn’t include any expansion of corporate-owned facilities, which I really want to see the company focus on going forward.


To conclude on JNH, I like that the company has a great partnership with Walmart and has a nice runway for growth. As I said last time I covered the stock on the podcast, I like that the company has been adding telehealth and online prescriptions to its offerings, which gives it some exposure to the health tech space and allows it to market its services on

Financially speaking JNH has a great balance sheet, has been growing revenue YoY, but it continues to trade with a pricey trailing EV/EBITDA multiple. But I do like that the company is focusing on expanding its corporate-owned stores which should increase their revenue and EBITDA margins. Plus, they are trying to cross-sell within its existing clinics which again should help increase revenue per clinic and hopefully boost margins.

It’s an interesting story, but I still think it is expensive where it is trading right now. If the company can focus on opening more corporate clinics and expand its revenue per clinic and EBITDA margins, there could potentially be some value here. But right now, I would be staying on the sidelines until I see management execute on what I mentioned above.


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