There’s a pretty good chance that this is the first time you’re hearing about Recon Technology (NASDAQ:RCON). But even if you’re familiar with the company, there are some compelling reasons to investigate RCON stock and add it to your portfolio.
Low-priced stocks can sometimes produce the biggest gains. Sure, there’s volatility involved, and that’s why it’s not advisable to “load the boat” on Recon Technology shares. For a small position size, though, RCON stock offers excellent potential in the international energy market.
At the end of the day, Recon Technology could be a hidden gem. From its patents to its surprising blockchain component, there’s a lot to like about RCON stock.
RCON Stock at a Glance
Easy come, easy go. That’s how it is in the financial markets sometimes, so investors should know their profit targets and be ready to sell at the right time. RCON stock provides a textbook example of this principle. From March to early June, the stock soared from $3 and change to a 52-week high of $17.50.
Yes, you read that correctly. We’re talking about a 5x move. That was the time to take your profits and run.
Anyone who fell victim to FOMO (fear of missing out) is probably regretting it today. The RCON stock price fell sharply in mid-June, landing around $4 on June 16. However, that’s not bad news if you’re just discovering the stock today. If anything, this is a chance to get in at a favorable price point if you’re feeling bullish about Recon Technology.
A Patent Powerhouse
So, let’s start with the basics. Recon Technology develops and markets automated oil-field services and products that enhance petroleum extraction in China.
Recon’s main customers are two of China’s leading state-owned oil and gas companies. According to their website, Recon has impressively “conducted automation projects for 80 percent of these companies’ oil and gas fields.”
It’s fair to say that Recon Technology is a patent powerhouse. The company’s proprietary technology and intellectual property portfolio includes:
- Eight software copyrights
- 22 product patents
- Four pending patents
Moreover, RCON stock is the first Chinese non-state-owned oil and gas service company to be listed on Nasdaq Exchange.
Additionally, there’s evidence that Recon Technology’s business model is quite lucrative. In a recent announcement, company founder and Chief Technology Officer Guangqiang Chen shared that service agreements could bring in “about $5 million of income.”
Evidently, Chen expects Recon Technology to further advance its energy-sector tech. “In the future, we plan to continue upgrading our technology in the… well recovery and injection business to provide more value-added services to our clients, and bring more long term returns to the Company,” Chen clarified.
A Blockchain-Based Solution
A Blockchain component is probably the last thing you’d expect from a company in the oil and gas industry. But Recon Technology has entered into a share exchange agreement with Starry Blockchain Energy Pte. Ltd. Starry is incorporated in Singapore and seeks to “leverage blockchain technology to drive sustainable energy solutions,” according to the announcement.
As per the agreement, Recon Technology will trade unregistered, restricted Class A shares with founding shareholders of Starry for 30% Starry’s shares.
Granted, Recon Technology isn’t directly adding blockchain tech to its own oil-field solutions. Nevertheless, it’s a major foray into the technology, which could be quite profitable in the long term.
Plus, there’s a sustainability angle here.
“Blockchain technology has the potential to reshape sustainable energy, making energy utilization more efficient and environmentally friendly,” Recon Technology CEO Shenping Yin explained. “Recon believes that our investment in Starry will help Recon quickly enter China’s sustainable energy market,” Yin added.
Look Beyond RCON Stock Volatility for Future Gains
If you didn’t know about them already, perhaps it was a pleasant surprise to learn that Recon Technology isn’t a run-of-the-mill energy business. No matter the future of traditional energy sources like oil and gas, the company has options with its blockchain and sustainability angles.
RCON stock is at a lower price point, so the timing could be ideal to take a long position. The stock will likely encounter volatility in the near-term, but the investment has the potential to pay off in the long run.
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On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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