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    Stock Alert for Ener1 Inc. (HEV)

    Ener1 Inc. (HEV), an energy storage technology company, develops compact, lithium-ion-powered battery solutions for the transportation, utility grid and industrial electronics markets. It has more than 700 employees with manufacturing locations in the United States and Korea. The Company also develops commercial fuel cell products and nanotechnology-based materials. HEV had net sales of $77.4 million for the fiscal year 2010, a year-over-year increase of 122%.

    Share Statistics (18-July-11) FY 

    2009

    FY 

    2010

    %  

    Chg

    Q1 

    2010

    Q1 

    2011

    %  

    Chg

    Symbol HEV Revenue, $Mn 34.80 77.41 122.4% 10.97 23.08 110.4%
    Current price $0.96 Gross marg. 11.7% 17.9% 53.0% 10.5% 23.7% 125.7%
    52wk Range: $0.76-$5.90 Oper. margin -67.1% -311.5%
    Avg Vol (3m): 2,193,410 Net margin -146.6% -88.9% -39.4% -139.8% -367.1% -162.6%
    Market Cap. 162.40M
    Shares Outstanding 169.09M EPS, $ -0.44 -0.48 9.1% -0.12 -0.28 133.3%

    Source: Reuters.com, SEC Filings.

    Recent News

    Shares of HEV traded up on news that it received approval from the Chinese government for the joint venture with Wanxiang Electric Vehicle Co. Ltd. to co-manufacture lithium-ion energy storage systems for the Chinese market.  The new company, called Zhejiang Wanxiang Ener1 Power System Co. Ltd, will initially focus on fulfilling existing contracts with China’s state power supplier State Grid.

    These projects include providing lithium-ion battery systems for a pure electric bus project for the city of Qingdao, a pure electric car project for the city of Hangzhou, as well as a grid energy storage system. It is expected that the joint venture will work with other existing customers as capacity increases.  An annual cell manufacturing capacity of 300 million Ampere hours, or about 40,000 electric vehicle battery packs, annually by 2014, is targeted by the joint venture.

    ENER chairman and CEO Charles Gassenheimer commented: “We’re pleased to begin working with our partners at Wanxiang, with whom we’ve developed a strong relationship over the past year, to bring our lithium-ion battery packs and cells to one of the fastest-growing markets.  We believe our technical expertise, coupled with Wanxiang’s manufacturing aptitude, will help us quickly deliver exceptional energy storage solutions for customers in China.”

    HEV soared as much as 32% on Monday to reach an intraday high at $1.04 a share.  About 5.80 million shares traded hands during the session, versus the 10-day average of 2.58 million.  HEV has so far reached a 52-week high of $2, its 52-week low being $0.13. It is currently below its 50-day moving average of $1.15 and below its 200-day moving average of $2.62. Market capitalization currently stands at $166.67 million and it has 169.09 million outstanding shares.

    Financial Summary

    HEV reported total consolidated revenue of $23.1 million for the quarter ended March 31, 2011, up 110% over the first quarter of 2010. Consolidated gross profit margin came in at 24%, that’s up from 10% in the year-ago quarter.

    For the first quarter of 2011, the Company posted a net loss of $84.7 million, or diluted net loss per share of $(0.51), citing an impairment charge.  This charge represents a $69.4 million increase in net loss, which represents a one-time $59.4 million impairment recorded during the first quarter to write down the Company’s investment in Think Holdings and a $13.9 million loss on financial instruments, which is primarily attributable to the impaired value of the investment. The impairment charge and loss on financial instruments totaled $73.3 million, or $0.44 per diluted share, for the three months ended March 31, 2011. This compares to a net loss of $15.3 million, or diluted net loss per share of $(0.13), during the same period in 2010.

    Financial Strength (18-June-2011) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 1.34 2.71 1.28 0.72
    Current Ratio (MRQ) 1.67 3.26 1.60 1.06
    LT Debt to Equity (MRQ) 35.72 18.78 46.80 134.17
    Total Debt to Equity (MRQ) 70.07 33.19 67.78 178.09
    Interest Coverage (TTM) -8.81 0.12 0.20 18.55

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among 11 polled investment analysts. Against the Ener1 Inc company.

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

    The seven analysts offering 12-month price targets for HEV have a median target of 4.00, with a high estimate of 9.00 and a low estimate of 1.00. The median estimate represents a 407.04% increase from the last price of 0.7889.

    Source: markets.ft.com

    Consensus Estimates Analysis

    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Sep-11 8 32.84 49.93 20.19 65.00
    Quarter Ending Dec-11 8 40.40 52.76 37.50 70.00
    Year Ending Dec-11 10 136.09 211.00 105.35 218.38
    Year Ending Dec-12 9 221.67 352.80 157.95 322.88
    EARNINGS (per share)
    Quarter Ending Sep-11 9 -0.07 -0.03 -0.09 -0.03
    Quarter Ending Dec-11 9 -0.05 -0.01 -0.10 -0.02
    Year Ending Dec-11 9 -0.30 -0.16 -0.65 -0.20
    Year Ending Dec-12 9 -0.17 0.17 -0.39 -0.16

    Technical Analysis

    Source: http://stockcharts.com

    HEV is below its 20-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.

    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 0, which implies that the underlying moving averages are trading lower.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    July18-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    A123 Systems Inc. AONE 5.53 696.56M n/a n/a 3.56 1.65
    Johnson Controls Inc. JCI 40.52 27.42B 16.57 12.39 0.69 0.62
    Ultralife Corp. ULBI 4.72 81.59M 23.60 9.08 0.50 0.44
    Valence Technology Inc. VLNC 1.10 170.36M n/a 11.00 1.74 1.03
    Industrial Electrical Equipment Median 6.02 n/a 0.21 n/a
    Ener1 Inc. HEV 0.96 162.40M n/a n/a 1.27 0.73

    Source: Thomson Financial

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