Thursday, January 7, 2010

Pure Play Energy Storage Stocks Year-End Review And Outlook (AONE; CBAK; HEV; VLNC; XIDE)

We like AltEnergyStocks' John Petersen on batteries and other storage*. Here's a piece we bookmarked and forgot to post:
With only a couple trading days left in 2009, this is as good a time as any for a performance review. The predictions I made at this time last year were pretty solid with an 80% accuracy rate on price direction. For the year, a $1,000 investment in each of my green star companies would have yielded a portfolio appreciation of 67%, which handily beat the broader market indices. That being said, my star and caution ratings were a good deal less prescient because I seriously underestimated the potential of both Maxwell Technologies (MXWL) and Active Power (ACPW), which appreciated by over 200%.

The following table identifies my current universe of pure play energy storage companies, reiterates my outlook at the beginning of this year, summarizes their performance during 2009 and offers my assessment of likely price performance during 2010. In the table, a single star signifies a neutral position.

Valence Technologies (VLNC) scares the hell out of me. It had a working capital deficit of ($10.8) million at September 30, 2009 and its stockholders were under water to the tune of ($74.7) million. Valence is currently surviving on life support financing from the open market re-sale of 650,000 shares every two weeks. The financing is enough to keep the doors open, but leaves little or no room to build a business. My experience with companies in comparable financial straits has not been good....MORE

*A123 Systems vs. BYD and Other Irrational Battery Investments (AONE; BRK.A)
We last touched base with AltEnergyStocks' John Petersen to bookmark his four-part primer we re-titled "Investing in the Battery Industry (AONE; ENS; HEV; XIDE)" (see post for why we didn't go with his headline). Today he takes a rougher approach....