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  • Energy Storage and Battery Companies Roundup

    Recent developments in the energy storage field have come to the attention of investors.  The sector is still speculative, as changing technology, access to materials and capital and the growing demand of each country will determine which companies will have the winning ingredients long term.

    Europe, the U.S. and China have each made individual levels of commitment to the electrification of vehicles.  China BAK (NASDAQ:CBAK), A123 (AONE), and Johnson Controls (NYSE:JCI) represent potential winners to supply the batteries needed for powering the electric vehicles coming online over the next few years.

    China BAK Battery, Inc. (CBAK) has recently announced it has signed a contract to provide high-power batteries to Jilin Hi-tech Electric Vehicle Co., Ltd., one of the largest automobile manufacturers in China.  As measured by production output, China BAK is one of the largest lithium-ion battery cell manufacturers in the world.  The contract, valued at $1 million, will provide 20 buses with battery packs and battery management systems.

    A123 Systems (AONE) announced a joint venture with SAIC Motor, China’s largest auto-maker by volume.  The agreement offers AONE great exposure to the Chinese auto market, and gives SAIC 51% ownership and AONE 49%.  This week Deutsche Bank upgraded A123 to Buy from Hold with a $17 price target.

    Johnson Controls (JCI) based in Milwaukee produces lead-acid automotive batteries as well as lithium-ion technologies for hybrid vehicles.  The company trades at about 13.4 times next year’s estimate, and has exceeded estimates the past three quarters.

    At best, expect electric vehicles to be on the road by 2011-2013.  The companies that can develop the right ingredients to provide needed energy storage represent potential investment opportunity in this movement.

    Disclosure: None
    Apr 13 6:42 PM | Link | Comment!
  • Companies Going Green through Innovation and Efficiency

    As businesses look to cut costs, managers seek more efficient products for their operations. A growing field of companies are catering to meet those needs.

    CREE, Inc. (NASDAQ:CREE), Fairchild Semiconductor (NASDAQ:FCS), and Rubicon Technology (NASDAQ:RBCN) are three companies in the building and efficiency arena that offer efficiency-related products.

    CREE’s use of LED (light-emitting diode) lighting as an energy-efficient and environmentally friendly alternative to the incandescent light bulb is a leader in its market.  CREE manufactures semiconductors that enhance the value of LED solid-state lighting, power and communications products by increasing their energy performance.

    Orlando, Florida’s largest resort, the Hyatt Regency Grand Cypress, has installed LED lighting by CREE in an effort to become a “greener” hotel.  The resort, located near Walt Disney World, recently replaced their older lighting fixtures in the 54 hallways and newly refurbished 10,000-square-foot lobby in part of a multi-million dollar renovation.

    Rick Jackson, Chief Engineer, Hyatt Regency Grand Cypress said, “We are constantly looking for ways to cut down on utility costs, and our lobbies and hallways are lit 24-hours a day, seven days a week.  Working with Regency Lighting, we were able to compare the cost and energy savings of Cree LED products with the traditional lighting we had been using. The LED lighting installations in the hotel hallways and lobby are not only significantly reducing our electric bill and saving on maintenance costs, but are providing better quality lighting for our guests.”

    Fairchild Semiconductor (FCS)  focuses on high performance semiconductors.  FCS products and components are used for telecommunications, automotive, consumer, computer and industrial applications, as a means to providing ways to conserve energy.

    Fairchild Semiconductor President/CEO Mark Thompson recently said, “We pushed adjusted gross margin over 30% and have strong momentum heading into the first quarter to exceed our past gross margin peak.” He added, “Strong execution on sales growth, margins and cost reductions also enabled us to generate $43 million of free cash flow in Q4 and a record $129 million for all of 2009.”

    FCS has a price-to-book of 1.24 and a forward P/E of 9.99.  After Zacks rated FCS a ‘strong buy’ and a positive sales outlook for the current quarter earnings estimates moved sharply higher.

    Rubicon Technology, Inc. (RBCN) provides sapphire substrates and optical windows used in applications including LED’s and radio frequency integrated circuits (RFIC’s).

    RBCN recently announced a two year capacity expansion plan, as the company is experiencing increased demand for its products.

    The company intends to double their current capacity to serve the growing demand for large diameter substrates. RBCN will also build a facility in Asia to expand post crystal growth processing operations.  The two new facilities are expected to open by the end of next year, and an expected cost  is estimated to be between $60 and $65 million over the next two years.

    Disclosure: None
    Apr 13 6:34 PM | Link | Comment!
  • Water - A Green Investment Alternative

    Approximately one in eight, or 884 million people lack access to safe water supplies, and less than 1% of the world’s fresh water (or about 0.007% of all water on earth) is readily accessible for direct human use.

    The World Health Organization states that one fifth of the world’s population (more than 1.1 billion people) live in areas where water is physically scarce.  The UN estimates absolute water scarcity will soon affect 1.8 billion people by 2025.  This implies that available supplies will not fully meet demand in the affected countries and regions.

    Investors can find ways to put money to work in companies making efforts to meet the challenges of this growing scarcity.  

    Nalco (NYSE:NLC) provides water treatment and process improvement products, and operates in 150 countries with over 11,500 employees.  In 2009 sales exceeded $3.7 billion.  Last year Warren Buffett’s company bought 8.7 million shares of Nalco Holding Co., worth $100.8 million as of Dec. 31.

    There are indexes and mutual funds involved in the water arena, including: Robeco SAM Sustainable Water Fund (SMWNX), The Water Infrastructure Fund (MUTF:KWINX) and The Power Shares Water Resources Portfolio ETF (NYSEARCA:PHO).  All three identify companies that focus on water and water-related issues.

    Disclosure: None
    Tags: NLC, PHO
    Apr 13 6:26 PM | Link | Comment!
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