What I Sold: Electro Energy, Inc. (NASD:EEEI)
Of all the stocks I've sold in response to the market turmoil, Electro Energy was the most painful to sell, both emotionally and financially. The sale was painful emotionally because I've been recommending this company for a year (albeit with the caveat that it was a speculative bet.) In each article I wrote I said something along the lines of "If EEEI can obtain financing..." Now even investment grade companies have serious trouble obtaining financing. If an outside company is interested in EEEI's manufacturing assets or technology, there is little reason for them to buy EEEI stock. Any outside...
Understanding the Development Path for Li-ion Battery Technologies
Last Tuesday a reader who works as a consultant in the energy storage and hybrid electric vehicles industries and sent me an unpublished "pre-decisional draft" of a DOE report titled National Battery Collaborative (NBC) Roadmap, December 9, 2009, a high-level policy analysis that discusses the merits, risks and expected costs of an aggressive eight-year initiative to foster the development and facilitate the commercialization of Li-ion batteries. The draft roadmap was written during the last days of the Bush administration, has since been partially implemented in the American Reinvestment and Recovery Act of 2009 and has never been officially released...
Selling Exide
Tom Konrad CFA Electric Storage Battery Company advertisement for Exide batteries in the journal Horseless Age, January 15, 1918 I sold my position in Exide Technologies (NASD:XIDE) on April 25th after the company was forced to shut down its Vernon secondary lead recycling facility by the California Department of Toxic Substances (DTSC.) In addition to the known arsenic furnace emissions, the DTSC cited the facility’s underground storm water system as not being in compliance with CA requirements. When I last wrote about Exide, I felt that the problems at the Vernon facility were not...
An Overlooked Christmas Gift For Energy Storage Investors
John Petersen Monday morning a reader sent me a link to a December 23rd press release announcing that the OM Group, Inc. (OMG) had agreed to buy EaglePicher Technologies LLC, a well regarded name in the battery industry, for $171.9 million, or roughly 1.4x sales. While I overlooked the release during the build-up to Christmas, the transaction is important because it provides a current bright-line reference point for energy storage investors on the difficult question, "what is a battery company worth?" EaglePicher was previously a unit of Eagle Picher Holdings, a public company that filed a...
High Conviction Paired Trade – Short Tesla Motors And Buy Exide Technologies, The Sequel
John Petersen Last November I broke with tradition for the first time in over 30 years and suggested a paired trade that bought Exide Technologies (XIDE) and shorted Tesla Motors (TSLA). Over the following three months, investors who made the trade and bought four Exide shares while shorting one Tesla share pocketed the following gains. 16-Nov-2010 16-Feb 2011 Net Entry Exit Gain Buy Four Exide -$29.76 $49.68 $19.92 Short One Tesla $30.80 ...
What Do Investors Get With BioSolar?
by Debra Fiakas, CFA
Last week management of energy storage developer BioSolar, Inc. (BSRC: OTC/PK) provided an update on the company lithium-ion battery design. The company’s engineers along with a manufacturing partner are still making changes to the design called the 21700 cell. Additionally, the company recently decided to take greater control over raw materials supply, potentially sourcing and processing materials in the U.S.
Engineers at BioSolar have been trying to increase the storage capacity of lithium-ion batteries by improving the anode component. The plan is to sell 'super anodes' to battery manufacturers to make existing lithium-ion batteries work like super batteries. Prototypes were tested in July...
Lithium-ion Battery Stocks: Investment Opportunities or Subsidized Laggards?
John Petersen I'm often critical of public lithium-ion battery manufacturers based on objective investment metrics including their financial condition, their results of operations, their potential markets and the fundamental soundness of their business plans, but I don't usually drill down into thornier issues like technical merit and business execution because those questions are out of my depth and in the words of Harry Callahan, "A man's got to know his limitations." Every once in a while, however, organizations that are competent to evaluate those issues publish analytical reports that can help investors cut through the hype...
Pure Play Energy Storage Stocks Year-End Review And Outlook
John Petersen 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...
Lux Research Confirms that Cheap Will Beat Cool in Vehicle Electrification
John Petersen On March 30th, Lux Research released an update on the vehicle electrification market titled "Small Batteries, Big Sales: The Unlikely Winners in the Electric Vehicle Market" that predicts: E-bikes and micro-hybrids carry minimal storage, but compensate with high volume. E-bikes show strong unit sales, as they sustain a 157 GWh storage market totaling $24.3 billion in revenues in 2016. Micro-hybrids benefit from increasingly stringent emissions limits, supporting 41 GWh and $3.1 billion in storage sales. Hybrid electric vehicles (HEVs) like Toyota's Prius grow steadily while PHEVs and EVs are at the mercy of external factors....
Are Investors Right To Panic About Exide Technologies?
Tom Konrad CFA Thursday Afternoon Panic On Thursday, April 4th, battery manufacturer and recycler Exide Technologies’ (NASD:XIDE) stock plunged, starting around 2pm. There was no press release or SEC filing from the company, or stories on the public newswires. Likely short sellers were stoking rumors on the chat boards that the company had filed for bankruptcy, and that the story was on Reuters. Electric Storage Battery Company advertisement for Exide batteries in the journal Horseless Age, January 15, 1918 Intraday, panicked shareholders dumped their shares for as little as $1.16,...
Last Battery Developer Standing
by Debra Fiakas CFA Advanced battery producer A123 Systems, Inc. (AONE: Nasdaq) has flamed out, with the cinders of its lithium ion technologies snapped up by Johnson Controls, Inc. (JCI: NYSE). Much has been written in the financial press over the past few weeks about the fate of A123 and the next step by Johnson Controls. What is more, because A123 had received government loan assistance, the political pundits have taken advantage of the company’s embarrassment to make their case for or against government in general and public alternative energy investment in particular. What really has me...
GE and EnerDel: Obvious Bedfellows
by Debra Fiakas CFA In April 2015, General Electric (GE: NYSE) won a contract to supply Con Edison Development with an 8-megawatt-hour battery storage system at a solar project in California. The system will incorporate GE’s Mark IVe control system and Brilliance MW inverters. However, instead of GE’s Durathon sodium-ion batteries, GE will be outsourcing or acquiring lithium-ion batteries for the project. Where will GE source the lithium-ion batteries for the Con Edison Development project? So far, spokespersons have been non-committal on the name. GE has had a number of...
Exide: Bargain Basement Battery Stock Ready to Start
Tom Konrad CFA Exide's Sundancer Electric Car. Photo by Frank Lodge, EPA. Public Domain NOTE: Since this article was first published, Exide Technologies (NASD:XIDE) stock has risen 22% from $2.31 to $2.82, but much of that rise was due to media confusion about a positive Credit Suisse research report on the unrelated Indian company Exide Industries, Ltd. Details here. Exide Technologies (NASD:XIDE) is shutting down its battery recycling plant in Frisco, Texas, and selling the surrounding 180...
Zap to Unveil Lithium Battery for Laptops at CES in Las Vegas
ZAP (ZAPZ) is at the Consumer Electronics Show in Las Vegas to unveil its new battery system to one of the world's largest events for the electronics industry. A pioneer in electric cars, scooters, bicycles and other advanced transportation technologies, ZAP is establishing an energy division for the advanced energy technologies it has been developing for cars and packaging it for the electronics industry.
DOE Reports That Lithium-ion Batteries Are Still Not Ready For Prime Time
John Petersen Last month the DOE released the 2009 Annual Progress Report for its Energy Storage Research and Development Vehicle Technologies Program. Like the 2008 Annual Progress Report I discussed in a February 2009 article titled DOE Reports That Lithium-ion Batteries Are Not Ready For Prime Time, this new report is a relatively upbeat assessment of lithium-ion battery research and development that once again provides a stark reality check for investors in energy storage stocks. In Section III of the Report, which focuses primarily on meat and potatoes issues like R&D objectives, technical barriers, technical targets and recent...
Energy Storage: A Bloody Q3 is Creating a Great Buying Opportunity
John Petersen Tom Lehrer is frequently credited with a quip that perfectly summarizes my feeling about the financial markets in the third quarter, "Apart from that Mrs. Lincoln, how did you enjoy the play?" During the quarter we were given box seats to classic political opera in two acts. Act One was set in Washington DC while Act Two moved to Europe so we could hear the same tortured songs of woe in a different language. We all know the opera has to end with the immensely popular "Kick the Can Chorus," but we suspended disbelief, bought into...
