Maxwell Technologies (MXWL) is one stock benefiting from the switch to more efficient power grids that use Green energy sources and the switch to hybrid and electric cars. The stock was first recommended by Cabot Green Investor Editor Brendan Coffey in March and purchased for that publication in May. (Brendan got in at 10 and the stock is now around 18, giving subscribers a cool 80% gain … but Brendan believes there’s more to come.)
Maxwell Technologies makes ultracapacitors that rapidly store and release electric energy. Maxwell focuses its efforts on the renewable energy industry, primarily applications that work in tandem with wind turbines, automobiles and other forms of transportation.
This is what Brendan wrote when he first recommended the stock:
“The main market for its ultracaps is wind. Because wind speed varies, turbines have trouble maintaining a steady voltage flow. The ultracapacitor stores and discharges energy to complement the turbine’s speed and helps send out a more level electrical flow. Maxwell’s systems are also used to adjust the speed and angle of the turbine blades according to the weather.
“Since starting to sell the product for wind in 2004, Maxwell has sold over two million units, but almost all to one customer–a German turbine company called InterCon. Recently however, Maxwell purchased a license to the method InterCon had patented so it can sell the ultracaps to other customers. Companies in the U.S. and China in particular have since started using Maxwell’s licensed offering.
“An equally exciting application is the use of ultracapacitors in transportation. Maxwell powers 200 municipal buses in New York, Chicago and Long Beach, California, with groupings of 500 to 700 ultracapacitors that are used to capture energy from braking and then redistribute it to accelerate the bus. The end result is that buses have 90% fewer emissions and are 25% more fuel-efficient because the ultracapacitor accelerates the bus from zero to 30 miles per hour, not the engines. … The obvious next market for ultracaps is automobiles, where the sheer scale of the car market could make Maxwell a significant revenue generator.”
And as noted above, Brendan still thinks this stock has big things ahead. This is what he wrote about it recently:
“Maxwell Technologies (MXWL) shares retreated back to support at 17.50 in recent sessions, but volume indicates it’s nothing more than a little pullback. The company will announce earnings after the market close on November 3. Expectations are for a net loss of three cents a share, but we expect that even if the company doesn’t beat that, the outlook should generate enthusiasm. Technically, the bullish story remains intact, so if you don’t have any, these levels are still a good place to buy.”
It’s not too late to take advantage of the shift to Green … and MXWL looks like a good place to start.
Excellent summation but not mentioned is the most compelling near term revenue opportunity. You touched on the couple of hundred buses in the US but its China where the buses are going to explode. 3 Of the largest bus manufacturers in China bought for 800+ buses to be delivered in 2009 with expectations of major follow on orders in 2010 and beyond. There are 15k worth of ultracaps in each bus. China has announced major hybrid bus rollout.
Are MXWL’s ultracapacitors and AONE’s lithium ion batteries competing for the same market? Which is more likely to win out?
Well, batteries are easily interchangeable into a car’s design, as opposed to ultracaps which would need more redesign. Batteries, unlike ultracaps, actually crate electricity through an internal chemical reaction (as I’m sure you know) whereas ultracaps need energy put in (i.e. they just store and discharge). For that reason, there is probably a disadvantage there. Cars use a tremendous amount of power for internal comforts – the typical air conditioner is suitable for the typical Atlanta home, is one stat I recently read-–so batteries probably have staying power until other aspects of cars like that change.
As far as Maxwell making “serious” money-–well, that’s hard to say-–certainly and maybe even more importantly, the stock is doing well on the promise it will make serious money. There is a very good chance China could generate significant business for Maxwell’s ultracaps for use in transit buses-–government officials there are very intrigued by how ultracaps are used in some buses here in the U.S. in Chicago and Long Beach, California, and of course since it’s China the potential is massive. I see the market developing as ultracaps being involved in add-on efficiencies in addition to better batteries etc., at least in the next decade, rather than supplanting them. And don’t forget, the original market for Maxwell’s ultracaps-–wind turbines, solar systems, cell phone towers-–continues to expand domestically.
That’s my take on it. Most importantly, the stock continues to hold up and shows signs of building a good base around 18 for a longer term sustainable move higher.
-Brendan