From Cabot Wealth Advisory 1/20/10 Sign up for free Cabot Waelth Advisory e-newsletter
The push to carbon trading, the promise of the U.S. to reduce emissions 17% from 2005 levels by 2020, the promise of China to reduce its “carbon intensity” by 45% by 2020, and the continuing program by Europe to slash overall emissions are buoying a whole swath of stocks.
As editor of Cabot Green Investor, I’ve already seen many of these rally sharply from the market bottom of the market hit last spring.
Many of the stocks we like best we only tell subscribers about, but I will tell you about one: Maxwell Technologies (MXWL), a company we first detailed to subscribers in March of last year when shares were at 5. They’re now at 19 and I think there remains a lot of upside to the company, both in near-term trading and the long haul.
Maxwell makes ultracapacitors, which store energy somewhat like batteries, but electrostatically. Their form allows them to store more energy while remaining much lighter than equivalent batteries then discharging energy more powerfully and quickly.
Maxwell mainly sold these as power packs for cell phone towers (so companies wouldn’t need to send workmen up the towers very often) but a few years ago, the company figured its ultracaps could work in regenerative braking processes, gathering energy from breaking and then discharging it on acceleration. It’s proving to be a great success.
Some 300 transit buses across the U.S. now use Maxwell ultracaps this way, powering up to 35 MPH without engaging the engine, cutting emissions by 75%—and cutting the amount of fuel needed too.
The big news now is that China is closely considering rolling out Maxwell’s technology across their multi-million unit bus fleet. Right now, there are early Chinese orders to supply 850 buses with the technology, which fetches $15,000 per bus for Maxwell.
Conservative projections based on standard replacement volumes of China’s massive public bus fleet and assuming only a percentage of those will be using ultracaps, the company estimates there could be orders to supply 10,000 buses a year, at $150 million annually, more than doubling Maxwell’s sales.
Beyond hybrid buses, Maxwell is also selling its ultracaps as storage mechanisms for energy generated by solar panels and wind turbines. A just-announced push into selling micro-sized ultracaps as back-up power systems for computers and handheld devices could be another breakthrough in a market hungry for lighter and more powerful solutions.
After consolidating during the last quarter of 2009, shares are again starting to show signs that buyers are in control, making now a good time to consider building a position.
Editor’s Note: Cabot Green Investor focuses on alternative energy, energy efficiency and Green lifestyle stocks. Cabot Green Investor subscribers have enjoyed double-digit gains on many companies ranging from Green Mountain Coffee Roasters to Telvent, and Brendan expects great things for 2010. Click here to start profiting from the enormous opportunities in the Green sector today: Information on Cabot Green Investor
Brendan Coffey is a member of the Cabot investment team and editor of Cabot Green Investor. A veteran financial journalist, Brendan has spent more than a decade writing about investing for publications including Barron’s, Forbes, The Wall Street Journal and a number of private-client brokerage newsletters.
By Brendan Coffey, Analyst and Editor of Cabot Green Investor
From Cabot Wealth Advisory, 7/16/09 Sign up for free Cabot Wealth Advisory e-newsletter
One Green stock I particularly like because it has a dominant position in a product that is used in solar and wind power systems as well as hybrid vehicles.
It’s Maxwell Technologies (MXWL), a San Diego company that has a long history of providing R&D services to the U.S. military and NASA.
The product is an ultracapacitor, a handy little electronic device that stores and releases electric energy. The difference between ultracapacitors and batteries is that batteries actually generate power through chemical reactions. Ultracapacitors simply store and release energy electrostatically and thus can be 10 times lighter than batteries and store and distribute energy 10 times more efficiently than batteries without the chemicals that present such as safety and disposal hazard with batteries.
Maxwell markets its ultracaps as Boostcaps, which are the fastest in the business thanks to the patented way they’re pieced together.
Ultracaps are ideal for two applications, one of which is wind. Because wind speed varies, turbines have trouble maintaining a steady voltage flow. Ultracapacitors store and discharge energy and help send out more level electrical flows.
Since 2004, Maxwell has sold over two million units to the wind industry, but almost all to one customer, a German turbine company called InterCon. Recently, however, Maxwell purchased a license to InterCon’s current-leveling patent so it can sell the ultracapacitors to other customers. Companies in the U.S. and China have since started using Maxwell’s licensed offering.
The other application is in hybrid vehicles. Maxwell’s Boostcaps are currently used in New York City, Chicago and Long Beach, California, on public buses, capturing energy from braking and then redistributing it to accelerate the buses up to 30 MPH without engaging the combustion engine. The end result is that buses have 90% fewer emissions and are 25% more fuel-efficient.
Companies in China and Germany are now starting to put Maxwell systems in their buses as well. In fact, on April 22, Maxwell received purchase orders from three of China’s leading bus producers for Boostcap ultracapacitor modules; by the end of 2009, nearly 1,000 buses should be using Boostcaps. Maxwell has also inked a deal with hybrid truck maker ISE to provide ultracaps for future vehicles and the company is now looking to get into Detroit’s next generation of electric and hybrid cars.
Boostcaps are powering Maxwell’s results and its stock. Subscribers to Cabot Green Investor learned about Maxwell first, and are enjoying a 40% profit on the position since we added it to our model portfolio in May. We believe there is still plenty of upside to Maxwell and its current price is a good entry point.
Editor’s Note: Each month in Cabot Green Investor we feature two promising stocks like Maxwell, along with commentary on the outlook for Green stocks in general and access to our Green-Timer, a technical indicator we’ve developed to help us gauge when to buy into the market. Subscribers also receive weekly updates, special updates when needed, periodic special reports and email access to me for questions and further thoughts on stock picks. I hope you’ll consider subscribing and learn to make a profit while improving our world. Click here for more information.