SmallCapPower
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Daily Stocks on the rise
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Cleantech stock of the week ( Week of August 23, 2010 )
| Junior Cleantech Stock Highlight: Ener1 Inc (NASDAQ: HEV) |
| Company Name: |
Ener1 Inc. |
| HQ Location: |
New York, NY |
| Company Website: |
www.ener1.com |
| Shares Outstanding |
144.97 Million |
| Stock Price (August 25, 2010) |
$ 3.16 |
| Market Cap: |
$ 448.09 Million |
| 52 Week Range |
$2.75 - $7.90 |
| Average Daily Volume |
340,265 |
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Cleantech stock of the week is a very popular segment on smallcappower.com to find interesting cleantech stocks that are featured on the site. This segment profiles green technology stocks and provides cleantech news and information on cleantech investing.
Share Highlight / 1-Year Stock Chart
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Business Overview
Ener1, Inc (Ener1) provides energy storage solutions by designing, developing, and manufacturing rechargeable lithium-ion batteries and battery systems. It operates in three segments: Battery, Fuel Cell, and Nanotechnology. The Battery segment is their biggest business and it offers Lithium-ion batteries for cars, trucks and other vehicles. Through its EnerFuel Subsidiary it develops and markets commercial fuel cell products and systems. The NanoEner subsidiary is involved in developing nanotechnology based materials and processes.
+ More info
What is interesting?
- Ener1 has a highly competitive product in the lithium-ion battery space with better chemistry than competition.
- The company operates in different industries and offers its products to customers in the transportation, stationary power, grid storage, military, and small cell markets. But the primary market is the transportation market.
- Lithium ion batteries have better output to weight ratio compared to lead acid batteries. Hence, in transportation applications were the weight criteria is important, lithium ion batteries tend to be the dominant player. While lead acid batteries are much cheaper, they weigh 3 to 4 times for every Kwh (kilo watt hour) of energy output.
- Ener1 has 2 modern production facilities in US and South Korea, and has a worldwide customer base.
- Alliances are the key to growth in this industry. The company has many strategic alliance and partnerships with leaders in the industry including Itochu of Japan, Volvo cars and Think (a Norwegian OEM manufacturer) to give comfort.
- Company has strong portfolio of mature patented technologies, and has a strong team of engineers who are continuously developing new technologies.
- Company formed a JV with Wanxiang, China’s top auto parts company to produce lithium ion battery systems. This gives an opportunity to tap the fast growing Chinese market without significant capital expenditure.
- Worldwide, governments are coming with stricter restrictions on carbon emissions and higher mileage requirements (CAFE Standard: 35.5 mpg by 2016E). This has led to auto manufacturers coming with more than 120 models of PHEV and EVs. The company is in a good position to ride on this wave.
- Company is taking part actively in government grant programs and this would equate to approximately three times leverage on the company’s equity contribution in such government funded projects.
- Company is introducing cost reduction programs in manufacturing by domestic sourcing and bulk purchasing of materials.
- Company’s revenue is increasing quarter over quarter and it has enough backlogs of orders and signed new agreements to supply Hyundai buses and Toro to keep up with this trend.
- The company’s share price is at the lower end of 52 week range.
Risks
- Company is still not profitable and with high expenses without serious cost controls it seems it not going to be profitable soon.
- Ener1 has substantial currency risk as approximately 80% of the revenue comes from Europe and Asia.
- Company is having tough time financing its working capital and it may have to tap the capital markets again to raise capital.
- Still Li-ion battery technology is not sustainable given the high cost of support infrastructure for Plug-ins.
- The underlying market drivers, technology adoption, alliances etc are still very fluid, with no clear standards, adoption uptake etc.
- Still needs considerable government funds which are always subject to policy changes.
- The consumer adoption of plug-in vehicles is still not certain.
Note: This Clean Tech stock of the week is brought to you by SmallCapPower analyst "Raj Ravindran"
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