Stock Alert for Ener1 Inc. (HEV)
  • Stock Alert for Ener1 Inc. (HEV)
  • Jumpstart; Ener1 Surges at Opening Bell on Triple-digit Revenue Growth, Narrowed Losses
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    Stock Alert for Ener1 Inc. (HEV)

    Ener1 Inc. (NASDAQ:HEV)

    Ener1 Inc. (HEV) is engaged in the business of designing, developing and manufacturing rechargeable lithium-ion batteries and battery systems for energy storage. Its end markets include transportation, stationary power (energy storage for utilities and renewable energy, such as wind and solar power in addition to battery backup systems for the home), military applications and small cell markets. In the transportation markets, the Company is developing systems to power the next generation of hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs) and electric vehicles (EVs). The Company also conducts research on and develops fuel cells and nano coating processes. On October 24, 2008, the Company acquired an 83% interest in Enertech International Inc. (Enertech). On January 6, 2009, HEV purchased an additional ownership interest in Enertech, thereby increasing its ownership from 83% to 89%.

    Ener1 Inc. was founded in 1985 and is headquartered in New York, New York.

    Share Statistics (28-May-10) FY

    2007

    FY

    2008

    %

    Chg

    Q4 2008 Q4 2009 %

    Chg

    Symbol HEV Revenue, $Mn 0.28M 6.85M 2346% 6.28M 10.95M 74.4%
    Current price $3.89 Gross marg. 100.0% 31.9% 68.1% n/a 9.8% n/a
    52wk Range: $7.90-2.75 Oper. margin -7516% -495.1% 93.4% n/a -139.5% n/a
    Avg Vol (3m): 648,648 Net margin -22535% -765.8% 96.7% n/a -140.1% n/a
    Market Cap. 487.64M
    Dil. Shares Outst. 125.7M EPS, $ -0.85 -0.41 51.8% -0.11 -0.12 9.1%

    Source: Reuters.com, SEC Filings.

    Financial Summary

    HEV recently announced financial results for its first quarter ended March 31, 2010. Net sales were $11 million in the first quarter of 2010 compared to net sales of $8.2 million in the prior year first quarter. Net loss was $15.3 million in the first quarter of 2010 compared to $7.3 million in the 2009 first quarter. Basic and diluted net loss per share were $.12 and $.13 in the first quarter of 2010 compared to $.06 and $.08 in the first quarter of 2009. Weighted diluted shares outstanding was 125 million in the first quarter of 2010 compared to 113.5 million in the prior year quarter.

    First-quarter highlights include:

    • EnerDel entire production system meets stringent product safety, reliability and quality standards required for high volume automotive programs in successful completion of Production Parts Approvals Process (PPAP) for THINK
    • Completion of first volume production run and shipment of commercial battery packs to THINK at rate 25 packs per week; manufacturing systems enter acceleration phase to ramp capacity to 900 packs or 23.4 megawatt-hours per month
    • EnerDel confirmed as exclusive supplier for Volvo C30 Pure Electric Vehicle (PEV)

    Financial Strength (28-May-2010) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 0.44 2.99 1.45 0.80
    Current Ratio (MRQ) 0.61 3.53 1.77 0.96
    Long-Term Debt to Equity (MRQ) 6.54 19.67 84.19 134.26
    Total Debt to Equity (MRQ) 45.70 36.07 110.26 200.86

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    Buy Outperform Hold Underperform Sell No Opinion

    This is the consensus forecast amongst nine polled investment analysts. Against the Ener1 Inc company.

    Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
    Latest 6 1 2 0 0 0
    4 weeks ago 6 1 1 0 1 0
    2 months ago 6 1 1 0 1 0
    3 months ago 5 1 1 0 0 0
    Last year 3 1 2 0 0 0

    The seven analysts offering 12-month price targets for HEV have a median target of 8.00, with a high estimate of 9.00 and a low estimate of 4.00. The median estimate represents a 150.00% increase from the last price of 3.20.

    Source: www.ft.com

    Consensus Estimates Analysis

    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Jun-10 5 17.08 18.50 15.10 21.75
    Quarter Ending Sep-10 5 27.36 32.70 21.71 23.75
    Year Ending Dec-10 6 102.22 120.40 83.06 99.98
    Year Ending Dec-11 6 223.72 259.70 135.90 234.98
    EARNINGS (per share)
    Quarter Ending Jun-10 6 -0.12 -0.10 -0.14 -0.08
    Quarter Ending Sep-10 5 -0.10 -0.08 -0.14 -0.07
    Year Ending Dec-10 7 -0.42 -0.33 -0.56 -0.27
    Year Ending Dec-11 7 -0.21 -0.09 -0.31 -0.10
    LT Growth Rate (%) 1 100.00 100.00 100.00 30.00

    Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=HEV.W

    Investment Highlights

    Indiana-based EnerDel, which makes advanced lithium-ion battery systems for the rapidly growing hybrid and electric vehicle industry, recently announced its parent company HEV signed a binding letter of intent (LOI) for a new joint venture with the electric vehicle division of Wanxiang, the largest ‘tier one’ auto parts producer in China. The joint venture will begin producing battery systems in 2010 for Wanxiang’s existing backlog of customers in China in the passenger and heavy-duty market segments, with the intention to expand to new customers and new geographies. EnerDel, which is simultaneously ramping production at its U.S. and Korean facilities, says the deal should rapidly accelerate its business plan by opening up access to the most important electric vehicle market in the world.

    Wanxiang is China’s largest auto parts supplier and second largest private company, with more than $10 billion in annual revenue and 30,000 employees. They are also the second largest stakeholder in Guangzhou Automobile, China’s most profitable domestic car company, which has joint venture partnerships that include Honda, Toyota and Fiat. In addition to Guangzhou Automobile, current Wanxiang customers include SAIC, Chana, Haima and Yutong, the world’s second largest bus maker. Wanxiang’s electric vehicle division has been supplying the 2010 Shanghai World Expo, and will supply the Asia Games, to be held in Guangzhou in 2010.

    HEV and Wanxiang signed a binding letter of intent this afternoon at EnerDel’s new manufacturing plant in Mt. Comfort, Indiana, just outside Indianapolis. The new venture will be governed by executives appointed by HEV and Wanxiang.

    Wanxiang will continue to fund the expansion of its existing manufacturing facility in Hangzhou, a rapidly developing industrial center located 112 miles southwest of Shanghai. The plant currently has capacity in place to produce approximately 15,000 electric vehicle packs or around 390 megawatt-hours (MWh), with plans to ramp to 20,000 packs or 520 MWh by the end of 2010. Under the new joint venture, this is anticipated to double by the end of 2011, which will produce up to 40,000 packs or around 1.04 gigawatt hours (GWh) of capacity.

    Wanxiang’s electric vehicle division has planned production for its current customer backlog of 2,000 powertrain and battery pack systems in 2010, which involves cars, buses and commercial utility vehicles. Both companies expect the new joint venture will enable planned production volumes for 2010 to increase by as much as 50%.

    EnerDel announced in January that it has embarked upon a $237 million expansion project co-funded by the U.S. Department of Energy, to meet anticipated demand for its advanced battery systems. This is part of an anticipated $600 million expansion project in the State of Indiana, which would yield capacity to produce around 120,000 electric vehicle battery packs a year, or 3.12 GWh. EnerDel expects this will generate up to 3,000 new jobs in the region.

    The Wanxiang-Ener1 collaboration will also involve HEV seed investor and strategic partner ITOCHU Corp., a $130 billion Japanese trading house. ITOCHU will work alongside the joint venture, ramping its China-based material suppliers to provide quality materials for automotive grade production.

    In addition to commercial relationships with THINK and Volvo, EnerDel battery packs are in test fleets with the Japan Postal Service, and demonstration projects with AC Transit and Mazda. EnerDel collaborates with Nissan on research and development, and the U.S. Department of Defense for a prototype hybrid Humvee.

    Source: http://www.ener1.com/

    Technical Analysis

    Source: http://stockcharts.com

    HEV is below its 13-day moving average. This bearish sign is even more significant because the moving average is also trending lower.

    HEV’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, HEV is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

    The MACD for HEV currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of zero, which implies that the underlying moving averages are trending lower.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    May28-2010 symbol Share, $ $ Mn 2010 2011 2010 2011
    Exide Technologies XIDE 4.32 326.68M n/a n/a 0.09 n/a
    Advanced Battery Tech. Inc. ABAT 3.28 224.96M 9.25 n/a 3.43 n/a
    A123 Systems Inc. AONE 9.19 958.90M n/a n/a 9.70 n/a
    Electronic Controls Median 503.51M n/a n/a 4.40 n/a
    Ener1 Inc. HEV 3.98 487.64M n/a n/a 10.47 n/a

    Source: Thomson Financial

    Insider Trading Activity

    NET SHARES PURCHASE ACTIVITY

    Inside Purchases – Last 6 Months

    Shares Transaction
    Purchases 30,000 2
    Sales 4,286 1
    Net Shares Purchased (Sold) 25,714 3
    Total Insider Shares Held 67.2M n/a
    % Net Shares Purchased (Sold) 0.0% n/a

    Net Institutional Purchases — Prior Qtr to Latest Qtr
    Shares
    Net Shares Purchased (Sold) (537,842)
    % Change in Institutional Shares Held (1.4%)

    Source: Yahoo Finance

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