170% in the last year, I think this penny action may not remain below 4p for much longer

When it comes to penny, the risks are high, but rewards can be even higher. In general, these actions are characterized by having a market capitalization below £ 100 million and a price of the action below £ 1. One of these met my radar this week calling my attention due to the nature of the operations and the price of the shares. Here is the lowdown.

In the ascent

I'm talking about Cuartio (LSE: QED). The business is an energy technology company based in the United Kingdom focused on developing and marketing alternative fuel solutions. When we are talking about alternative fuel, we are mainly looking for low cost and low alternatives emission to heavy fuel. Some of the sectors that would benefit the most are marine shipping, energy generation and other industrial areas. In short, this is a big target market.

The business earns money mainly through the license of its patented technology for refineries and energy plants. It is not an exploration firm or a direct producer, but it has these types of companies that are associated with it to use its technology. Sometimes, offers are structured in such a way that it obtains a margin in final fuel sales.

Good impulse building

The price of the action has triggered 170% in the last year, currently quoting 3.64p. Most of this jump arrived at the end of last year after large news communications. One was an agreement with Sparkle Power, a thermal energy producer in Panama, to supply a manufacturing unit at the energy plant. This was the first test in that type of specific engine, which gives investors optimism that technology can be used in a much wider range.

Earlier this year, he also announced an agreement with the European Climate Agency (Cinea) to help work to reduce greenhouse gas emissions and energy efficiency for marine vessels. The potential for subsidies, contacts and new agreements of this is great.

I think that more offers like these will put the business in a really strong position to grow in the coming years. As the world revolves to renewable energy, Quadrise has an advantage in providing an alternative for the key sectors that they simply cannot turn to use something like wind or solar energy.

Risks to take into account

Like most of Centa's actions, the main risk I see for the quadrant is the volatility in the price of the shares. He hit 8p at the beginning of this year. So, although it has increased by 170% in one year, some investors who bought at the top would have decreased more than 50% at this time. Given the low market lid, even relatively small market orders can cause a large reaction of shares.

Another concern is that the quadrant could be bought by a larger company. Although it is patent, large producers or refiners could find ways to adjust and replicate technology with a more extensive research and development budget.

Even with these concerns, I think it is an action worthy of consideration for investors who feel comfortable with the risk of having penny actions.