Tesla a Bright Spot in Still Dim, but Improving Electric Car Industry

Photo of Nissan Leaf S courtesy of evworld.com

Photo of Nissan Leaf S courtesy of evworld.com

Anyone watching the still slow but improving progress of the electric car industry may have seen the Bloomberg Businessweek story on the “Tale of Two Electric Car Makers: Tesla Soars, Fisker Flops” (http://www.businessweek.com/articles/2013-05-08/a-tale-of-two-electric-car-makers-tesla-soars-fisker-flops). Tesla Motors not only produced a profit in the first quarter, as advertized, but also increased its guidance on sales for the year, from 20,000 to 21,000 cars. TSLA revenues were up 83 percent year-over-year to $562 million and the stock is soaring (see below).

While the article outlines supply chain and battery issues and other “kinks in its processes” Tesla needs to iron out, their stock is soaring and the outlook looks good. The contrast was provided by Anaheim, CA-based Fisker Automotive, which is laying off employees and hiring bankruptcy consultants, the article reports. Another electric car maker, Los Angeles-based CODA Automotive, recently filed for bankruptcy protection and announced it was “focusing its business strategy on the growing energy storage market,” according to a company filing.

For more positive electric car news, the BBC posted an article this week on the Nissan Leaf (http://www.bbc.com/autos/story/20130509-leaf-charges-into-mid-life) as it “charges through mid-life.” The Leaf, billed as “the first truly global mass-produced electric vehicle,” now includes the Leaf S, a lower cost model “designed to lower the barrier of entry to EV ownership.” One of the cost cutting moves was to move its assembly line from Japan to another Nissan factory in Smyrna, TE.

The BBC put the Leaf through its paces and managed to get 75 miles from a full charge, right about in line with Nissan estimates. Competitors mentioned in the article include the Toyota Prius PH-V and Ford C-Max Energi, both plug-in hybrids.

If anyone out there is charged up about the electric vehicle market, and knows of a small cap stock play in this market, please let us know. Meanwhile, we’ve been following a few small caps, plus Tesla to see how their stock is moving. We’ve also added a new company, Car Charging Group, to our list.

Palo Alto, CA-based Tesla Motors (Nasdaq: TSLA, http://www.teslamotors.com/) manufactures the Tesla Roadster, the Model S and other electric vehicles and electric powertrain  components. It’s way too large for our small cap blog focus, but just as a reference, the last time we looked at Tesla last February 20 it was trading at $38.90 with a market cap of $4.4 billion. As we mentioned, TSLA stock has been on a huge roll. It closed May 15 at $84.84, up $1.60 for the day. Its 52-week trading range is now $25.52-$97.12.

Santa Rosa, CA-based ZAP (OTC: ZAAP.OB, http://www.zapworld.com/) makes a variety of all-electric vehicles including trucks, motorcycles, shuttle buses and sedans and was formerly known as ZAPWORLD.COM. When we last checked on Feb. 20 its stock closed at $0.08 with a market cap of $24. ZAAP closed May 15 at $0.14, up 3 cents for the day, with a market cap of $42 million. Its 52-week trading range is $0.06-$0.27.

San Diego-based Maxwell Technologies Inc. (Nasdaq: MXWL, http://www.maxwell.com/) was formerly known as Maxwell Laboratories. The company manufactures ultracapacitors that are energy storage devices and power delivery systems for use in transportation, automotive, IT and industrial electronics.  MXWL closed back on Feb. 20 at $10.01 with a market cap of $292 million. It closed May 15 at $6.36, up 11 cents for the day, with a market cap of $185 million. Its 52-week trading range is now $4.90-$11.08.

Miami Beach-based Car Charging Group (OTCQB: CCGI, http://www.carcharging.com/) caught our eye with the announcement March 12 that it was acquiring EVPass, a company building destination charging networks for EV charging. CCGI  is also in the business of building charging station networks and has been busy making more acquisitions. Earlier this month, CCGI announced it had acquired 350Green LLC. CCGI closed May 15 at $1.34, up 4 cents for the day, with a market cap of $70.8 million. Its 52-week trading range is $0.60-$2.

Buzz Zaino: Royce Fund Manager Sees Strong Growth Upside for 2013, Boosted by Housing, Transportation, IT Spending

ZainoB_gBoniface A. (“Buzz”) Zaino is a portfolio manager advising several of the high-profile Royce Funds, to wit, the Royce Opportunity Fund and associated funds. By any measure a veteran of the industry, Buzz has more than 40 years of experience in the financial services industry, the last 14 with Royce. I first met him when he was managing the Value Added Funds for Trust Company of the West more than 20 years ago, but prior to that he was president of the Lehman Capital Fund and a principal of the “original” Lehman Brothers. He went to school at Fordham, and took his MBA from Columbia. In 44 years, Buzz has seen enough economic cycles to offer an MBA from the University of Zaino.

Buzz agreed to talk about his 2013 outlook from his home in Aspen which, like much of the US snow belt, has seen little of the white stuff so far this year.

JA: It seems generally agreed that the US economy is growing at a slower pace than it has coming out of previous recessionary periods. What is your outlook for 2013? Will the economy continue to grow, and if so, will it grow at the same rate, faster or slower?

BZ: The reason that the US economy has had a slow lift-off has been that coming out of recessions in the past, the Fed has lowered interest rates, and people took that opportunity to buy houses and cars. This recession was different, because the banks were not giving out money, because money was scarcer and because bank lending standards were significantly more stringent. So there was a hiatus and it took a lot longer for the economy to recover. The recovery finally started this year, 2012, and it is finally beginning to give a boost to the economy, especially as construction gets going again. That boost is going to continue, and it will help us accelerate in 2013. But the recovery was complicated by the fact that Europe went into recession. American companies tend to be worldwide in scope, and caution at the top levels helped bring inventory levels down due to the European recession. That meant that capital spending was also muted. I think that capital spending is also constrained in anticipation of the budget settlement that is still out in the future. A “normal” recovery was delayed until 2012, and then delayed again by the European recession. But those delays now give us the opportunity to accelerate as 2013 progresses.

JA: Will we get a budget?

BZ: Sooner or later, yes. We will get a budget deal out of Congress. Once we have that deal defined, we can go forward from there. That will be a positive, and will be on top of the acceleration we can expect from normal factors like housing and auto sales. We could get a nice surprise in 2013. But we’re cautious about January.

JA: Why is that?

BZ: Most managers will make their January decisions based on their December orderbooks, and we don’t think the December orderbooks will be strong enough to give them confidence, but as we go into February and March, a lot of the inventory build-up will have started to occur, so the orderbooks will look better. And the trade between China and the US is expanding again, after a period of slower growth. We think that could have an increasing effect, especially after the Lunar New Year. By the end of the first quarter, growth could be looking quite good.

JA: The harsh talk by Washington DC and Beijing won’t slow down that growth?

BZ: The China-US trade is too big a market for both sides, and politics will not interfere with it. Certainly the Chinese government’s expansion plans are not going to be held back. There are Chinese hotel companies looking for hotel properties in the US – to build or to buy. Very smart people, and I don’t think either side is going to let politics inhibit our trade relationships. Nothing is going to come of the yelling.

JA: Will the growth rate be higher going into the second quarter then?

BZ: I think we could have a weak-ish economy and market in January, like I said. Everyone will be paying higher taxes, at least with FICA deductions back in everybody’s paychecks. With orderbooks in December that may not be strong, managers and consumers could still have their hands in their pockets. If we have a warm winter like we had last year, we could have more construction starts. If we have a cold, snowy winter, those starts could be delayed, and the weak period could extend through January. We are looking very favorably at housing. Housing is still somewhat depressed, but the housing stock is aging — and mortgage money is more available than it was a year ago. And the automobile fleet is aging and will need to be updated, as will the commercial truck fleet.

JA: Do you think the growth rate will exceed 2%?

BZ: Yes, better than 2%, but maybe not in January. But after that it could be substantially more than 2%. Four to five percent would not be out of the ballpark, although 5% would be at the high end of probability. And the market would react to that. If the market is down – and cheap – they don’t want to buy, but if it goes up 15%, everybody wants to buy. If UPS starts to replace its fleet and buys trucks, all the others will update their fleets at the same time. It’s much cheaper to run your truck or your fleet on CNG (compressed natural gas) too. A town near Aspen has converted their entire bus fleet to CNG, and although they can fuel up at the bus barn, there are additional CNG stations being built. Boone Pickens and his group are encouraging these new CNG fueling stations. We’re surprised that trucking companies are not moving faster than they are toward natural gas. We have an investment in a building materials company and I asked them if they are considering CNG, and they said they had not looked into it, but they would. Conversions to CNG are not expensive. Ford and GM are now offering pickup trucks with CNG engines.

JA: Is there going to be a fiscal cliff solution?

BZ: Eventually. Whether or not it happens before December 31, there’s no way to tell. But the congress can pass a continuing resolution to postpone the cuts and tax increases while they work on it. Eventually this Mexican standoff will be resolved. And by the way, the fiscal cliff does not seem to be a big motivator for the American consumer. They need to replace things, and they are not overly concerned with the big picture as long as the economy seems to be getting healthier.

JA: What sectors are going to do better as the economy improves?

BZ: IT spending will pick up. There is a big pent-up need factor here, and it has been a relatively easy way to postpone expenditures for the last couple of years. Windows 8 is very much under-rated. It takes a while for people and corporations to decide to make a big change like the change to Windows 8, but it will be very good for PC companies. Corporations need to have the latest and fastest. Technology in corporate environments needs to be the newest and most capable. Areas like IT are why you can think of higher growth rates. After this hiatus, there is enough pent-up need to start a new momentum.

JA: How about healthcare IT?

BZ: I went to see my physician in New York, and he is one of the best, highest-rated doctors in his specialty. He was really annoyed that he was going to have to convert my file, which is a manila folder with all kinds of paper and bits of paper in it – to computer files. I thought, hey, this is 2012, get with the plan.

JA: How about housing? Any areas there where investors ought to be looking?

BZ: We have had a good run with housing companies, and we think that will continue. One area that may have real potential is mortgage insurance companies. It is a fairly narrow field, and some people infer from the papers that these companies may not be able to cover their losses. The reality is that housing prices could be moving up at a rate of nearly 1% per month in the near future, and as a result those liabilities would be decreasing. Mortgage applications for refinancing were up last week 47% year over year. That’s a meaningful number. Apparently not everyone is under water. Those areas that have dropped the most are improving the fastest in some cases. California is one of those.

JA: Any areas where you would be wary going forward?

BZ: Defense companies. We think there will be lots of cutbacks, lots of programs cancelled. Defense personnel contractors may do better as the armed services cut back their personnel. Company by company there may be some good bets in defense, but we believe the sector will be down.

JA: And in summary?

BZ: Other than defense, it is going to be a broad-based recovery. If we have a growing, recovering economy, interest rates would rise, and inflation would rise. Commercial banks will do better. They will use their asset bases to increase lending. The moderating factor will be that regulations will add some cost, but that will not be an inhibitor for the larger banks looking to expand regionally. If I were a larger bank and wanted to expand regionally, it would be attractive to me to buy a regional bank and expand my profitability without appreciably expanding my regulatory exposure.

JA: Thanks, Buzz.

Note: Buzz prefers not to name specific companies in his portfolios. The interviewer has no investments in the sectors discussed, and does not intend to initiate such investments in the next few days or weeks.

Soaring Automobile Sales Attributed to Superstorm Sandy, Low Interest Rates

Soaring November automobile sales were all over the news this week. Honda, Nissan, Hyundai and BMW had their best November ever, according to the Los Angeles Times  (http://www.latimes.com/business/la-fi-autos-auto-sales-20121204,0,2696209.story). Volkswagen had its best November since 1973.

photo courtesy of www.boston.com

photo courtesy of http://www.boston.com

Overall, imports did better than domestic brands thanks largely to new products like the revamped Honda Accord and Nissan Pathfinder, according to the Times report. A total of 1.1 million vehicles were sold in the month, 15 percent more than a year ago. Fuel-efficient cars, hybrids and small SUVs were among the most popular vehicles and “for the first time since it started selling hybrids in the U.S. in 2000, Toyota had serious competition in the hybrid market,” the Times noted.  In only its second month of sales, Ford sold 5,000 of its new C-Max hybrid in November and 6,500 hybrids overall in the month.

Just how much to read into the sales totals is difficult to say, according to experts, because Superstorm Sandy was credited for bolstering the numbers. An estimated 250,000 vehicles were destroyed in the storm and the purchase of replacement vehicles probably skewed the monthly numbers. And, as we reported in October, low interest rates are also stimulating the auto market.

Over the long term, any increases in automobile sales should benefit small cap automobile industry-related stocks, which have been hit in recent years by the global slump in sales. Here are a few randomly chosen small caps:

Troy, MI-based Meritor Inc (NYSE: MTOR, http://www.meritor.com/) develops drivetrain mobility and braking solutions for trucks, trailers and specialty vehicles and aftermarkets in the transportation and industrial sectors. Its products are marketed globally under its Meritor brand or under the brands Euclid, Mascot, Trucktechnic and Gabriel, among others. In January 2012 Meritor sold its France-based axle operation to Renault. MTOR has a 52-week trading range of $3.83-$8.74 and a market cap of $427 million. It closed Dec. 4 at $4.42, up 11 cents on the day.

Detroit-based American Axle & Manufacturing Holdings (NYSE: AXL, http://www.aam.com/) designs and manufactures driveline and drivetrain systems and related components and chassis modules for light trucks, SUVs, passenger cars and commercial vehicles. The company’s products include axles, drive shafts, power transfer units, transfer cases, chassis and steering components, transmission parts and driveheads, among other products. AXL’s 52-week trading range is $7.93-$13.08 and its market cap is $765 million. It closed Dec. 4 at $10.22, up 10 cents for the day.

New York, NY-based Fuel Systems Solutions (Nasdaq: FSYS, http://www.fuelsystemssolutions.com/) designs and manufacturers alternative fuel components and systems for the transportation and industrial markets. Its components and systems control the flow and pressure of gaseous alternative fuels such as propane and natural gas used in internal combustion engines. The company operates in two divisions: IMPCO Operations and BRC Operations. In April 2011, IMPCO U.S. purchased NaturalDrive. FSYS’ 52-week trading range is $13.38-$29.41 and market cap is $294 million. FSYS closed Dec. 4 at $14.67, down 51 cents for the day.

Northville, MI-based Gentherm * (Nasdaq: THRM, http://www.gentherm.com/) is a global developer and marketer of thermal management technologies for a broad range of heating and cooling and temperature control applications. It’s also developing more efficient thermoelectric devices. THRM’s Climate Control Seat system, based on its proprietary thermoelectric technology, is being offered in more than 50 vehicles made by the world’s leading automobile manufacturers including Ford, General Motors, Nissan, Toyota, Kia/Hyundai, Land Rover and Jaguar, among others. THRM’s 52-week trading range is $10.06-$17.74. As recently as early October it was trading for more than$13. It closed Dec. 4 at $11.48, down 42 cents on the day. Market cap is $341 million.

Southfield, MI-based Federal-Mogul Corporation (Nasdaq: FDML, http://www.federalmogul.com/) is a global supplier of powertrain and safety technologies. Its customers are OEMs of automotive, light, medium and heavy-duty commercial vehicles, agricultural, marine, rail, aerospace, off-road and industrial applications as well as the worldwide aftermarket. It operates at 169 manufacturing, distribution and technical facilites. Last July Borg-Warner sold its spark plug business to FDML. Its 52-week trading range is $6.90-$17.97 and market cap is $706 million. FDML closed Dec. 4 at $7.14, down 15 cents for the day.

* Denotes client of Allen & Caron, publisher of this blog

Sold! EBay Buys into Alternative Energy Fuel Cell Power

Fuel cells made headlines in the major financial publications this week with the announcement that eBay is planning to build a new data center in Utah powered by, yes, alternative energy fuel cells. The new eBay data center will use approximately 6 million watts of power generated on-site by fuel cells made by Sunnyvale, CA-based, privately-held Bloom Energy, according to the New York Times (http://www.nytimes.com/2012/06/21/technology/ebay-plans-data-center-that-will-use-alternative-energy.html?scp=1&sq=james%20glanz%20ebay&st=Search).

eBay logo courtesy of LiewCF.com

While the new center, which will also serve eBay’s payment service PayPal, will be hooked up to the electricity grid as a backup, the news is considered a major victory for alternative energy backers, fuel cell believers and the environmental industry in general which has long complained that Internet companies are too often relying on coal power to run their data centers.

The Times’s story notes that fuel cell arrays are being used by major corporations including AT&T, Kaiser Permanente and Wal-Mart but nothing of this scale. Nearly all comparable data centers now draw the majority of the power from the grid.

Bloom Energy’s version of fuel cells are “essentially large batteries whose charge is maintained by by the hydrocarbon energy contained in natural gas,” according to the Times. Since the price of natural gas has plummeted in recent years, fuel cells have become more economically competititve, the story notes. And since the charge in the Bloom Energy cells is maintained by chemical reactions, not combustion, important efficiencies are gained. Another advantage is the fuel cells generate energy on-site, meaning no energy is dissipated as it travels along transmission lines.

All great news for environmentalists, Bloom Energy and, hopefully, eBay. But does it translate to hope for the mostly struggling small cap fuel cell companies? Based on investor reaction to the news, there seemed to be little benefit, at least initially.

Lathan, NY-based Plug Power Inc. (Nasdaq: PLUG, http://www.plugpower.com/) manufactures fuel cell systems for industrial off-road markets and stationary power markets. The PLUG stock, which was as high as $9 in early 2011, has traded much lower in recent months. Its 52-week trading range is now $1.11-$2.71 and its market cap as of June 21 was about $44 million. Roth Capital cleantech analyst Phillip Shen initated coverage of PLUG a year ago with a buy and a price target of $4. PLUG stock closed June 21 at $1.12, down 2 cents for the day.

Danbury, CT-based FuelCell Energy Inc. (Nasdaq: FCEL, http://www.fuelcellenergy.com/) makes a variety of fuel cells and its stock trades actively, more than 2 million shares a day on average. But apparently its second quarter numbers showing revenues down 15 percent from a year ago has soured investors. Its 52-week trading range is $0.80 to $1.95 and it closed June 21 at $1.06, up 2 cents on the day.

British Columbia-based Ballard Power Systems (Nasdaq: BLDP, http://www.ballard.com/) manufactures and sells fuel cells and fuel cell materials for the automobile and other markets. News from Ballard included business partnerships with Brazilian and European bus companies. But the company this week announced a revision in 2012 revenue and adjusted EBITDA downward due in part to contract negotiaations with a Brazilian customer. The stock, which was a high as $2.42 in April 2011 has dropped in recent months. It closed June 21 at $1.12, down 5 cents. Average daily trading volume is now about 124,000 shares.

Ontario, Canada-based Hydrogenics Corp. (Nasdaq: HYGS, http://www.hydrogenics.com) designs, develops and manufactures hydrogen generation and fuel cell products based on water electrolysis technology and proton exchange membrane technology. HYGS recently announced a significant order for a “power to gas” project for energy storage in Germany. The 52-week trading range of HYGS is $4.47-$7.10 but the stock trades lightly, about 7,500 shares a day. Its market cap is about $38 million. HYGS closed June 21 at $5.85, down 42 cents for the day.

Global Interest in Cleaner-Burning Natural Gas on the Upswing

The buzz about natural gas seems to be building daily. Natural gas, the cleaner-burning fuel, is on the upswing while coal, the not-so-clean burning fuel, is on the downswing, or at least losing favor in some circles.

Rex W. Tillerson, the CEO of Exxon Mobile Corp., the world’s largest publicly traded oil and gas company, took a stand on the subject June 4 at the 25th World Gas Conference in Malaysia. Perhaps he’s biased toward gas and perhaps the Asia-Pacific setting, where energy demand is skyrocketing, helped taint his remarks. But they set a strong stage for natural gas and its “historic rise to prominence in global energy markets,” noted Tillerson, whose company also announced this week that it was investing in a coal-seam gas venture in Australia.

Tillerson, noting that the world is now at a “historic moment in the evolution of energy markets,” touted natural gas as “quickly becoming a key enabler of economic growth and environmental progress around the world.” Tillerson’s complete speech can be found at www.exxonmobil.com/speeches.

Despite all the buzz, the price of oil and natural gas has been dropping, due at least in part to the softness of demand in places like China and Europe, according to some experts. These price drops have beaten down the stock prices of many of the natural gas companies at least in the short term. With the natural gas prices finally coming back, is it time for a rebound?

Here are some randomly chosen small cap companies that do businesses in the natural gas industry (althought not necessarily “pure plays.”)

Dover, DE-based Chesapeake Utilities Corp. (NYSE: CPK, http://www.chpk.com) is a diversified utility company that provides natural gas distribution services and sells natural gas in Delaware, Maryland and Florida. While its stock is relatively thinly traded (only about 35,000 shares a day) its price has stayed relatively strong for about a year and its 52-week range is narrow, only $36-$44.53. Market cap is $415 million. The stock closed June 8 at $43.29, up 29 cents on the day.

Midland, TX-based Natural Gas Services Group (NYSE: NGS, http://www.ngsgi.com) makes natural gas compression equipment for the natural gas industry in the U.S. After dipping down to about $11 last September, the stock has recovered somewhat. It closed June 8 at $13.59, up 10 cents on the day. Market cap is $166 million and 52-week trading range is $10.92-$17.22.

Oklahoma City-based Gulfport Energy Corp. (Nasdaq: GPOR, http://www.gulfportenergy.com) is focused on exploration along the Louisiana gulf coast and in West Texas, as well as oil sands development. Its market cap is now $1 billion. A year ago this stock was being featured as a “hot stock” and was trading in the mid-$30 range. But it has been heavily sold lately. Its 52-week range is now $16.42-$37.80 and it closed June 8 at $18.82, up 8 cents on the day.

Denver-based Forest Oil Corp. (NYSE: FST, http://www.forestoil.com) engages in the exploration, development and production of natural gas and natural gas liquids, along with oil in the U.S. It’s primarily focused on areas of Texas and north Louisiana.  Its stock is trading at the bottom of its 52-week range (&7.43-$28.22) and on June 6 was upgraded to buy from hold by Cannacord with a price target of $12. Also, Real Money’s Bret Jensen picked it as a ‘Risk On’ Energy Play for QE3 (http://www.thestreet.com/story/11573008/1/jensen-two-risk-on-energy-plays-for-qe3.html?puc=_atb_html_pla1&cm_ven=EMAIL_atb_html) on June 8. It’s market cap is about $900 million. FST closed June 8 at $7.87, down 35 cents for the day.

Radnor, PA-based Penn Virginia Corp. (NYSE: PVA, http://www.pennvirginia.com) is an independent oil and gas company engaged in the exploration, development and production of natural gas and oil in various onshore regions of the U.S. PVA has natural gas interests in East Texas and Mississippi. Its 52-week trading range is $3.92-$15.47 and its market cap is $244 million. It closed June 8 at $5.39, down 9 cents on the day.

Small Caps Hoping for Lift from Booming U.S. Auto Sales

The month of May was a bummer for most investors, judging on the big hit all the major indexes took. But not for the nation’s Big Three automakers: Ford, General Motors and Chrysler, according to Marketwatch (http://www.marketwatch.com/story/big-three-auto-sales-roar-in-may-2012-06-01?siteid=bnbh). With the help of

Photo courtesy of Port Clinton Ford

 

looser credit demands for buyers, all three posted double-digit sales growth, according to the story, which was picked up by most major news outlets.

For General Motors, May 2012 was the best month of sales since August 2009 and 11 percent better than a year ago. GMC vehicles and Buick were up 19 percent and Chevy was up 10 percent, noted the Marketwatch piece. For Chrysler, which is adding production capacity “as quickly as possible,” it was the best month in five years. U.S. sales for Chrysler rose 30 percent in May and Dodge posted its 26-th consecutive month of year-over-year sales growth, the Marketwatch story noted.

Ford’s U.S. sales rose 13 percent led by the F-Series and E-Series trucks and the Fusion.

We’ve been covering a random mix of small cap auto dealerships and automotive-related companies that are suppliers, parts makers and partners of the major OEMs. Here’s a look at how they are faring: 

Duluth, GA-based Asbury Automotive Group (NYSE: ABG, http://www.asburyauto.com/) operates 79 auto dealerships in 18 metropolitan markets in 10 states. More than half of the dealerships are Toyota or Honda dealerships. Two months ago when we first looked at ABG it was trading at nearly $27. It closed June 4 at $24.30, down 49 cents on the day. Market cap is $766 million, 52-week trading range is $14.96-$29.62..

Bentonville, AR-based America’s Car Mart (Nasdaq: CRMT, http://www.car-mart.com/) sells older model used vehicles and vehicle financing at 113 dealerships in nine states. About two months ago CRMT was trading at just less than $44. It closed June 4 at $40.95, down $1.05 on the day. CRMT’s market cap is $384 million and 52-week trading range is $25.81-$48.24.

Houston-based Group 1 Automotive (NYSE: GPI, http://www.group1auto.com/) sells new and used cars, light trucks and auto parts, vehicle financing and insurance.  It owns and operates 131 franchises offering 31 automobile brands with 104 dealership locations, 25 collision centers in the U.S. and an additional five dealerships and three collision centers in the UK. As recently as April 3 it was trading for $59.15. GPI closed June 4 at $48.26, up 19 cents for the day. GPI’s market cap is $1.04 billion and 52-week trading range is $33.31-$59.97.

Charlotte, MI-based Spartan Motors (Nasdaq: SPAR, http://www.spartanmotors.com/) makes motor vehicle chassis and bodies for OEMs. Its stock was trading at about $5.50 last fall but has dropped pretty steadily since. SPAR had a good day June 4 when the stock closed at $4.43, up 23 cents for the day. The Wall Street Cheat Sheet recently picked SPAR as a company “to watch” based on the GM results and the general automotive industry. Market cap is $150 million and 52-week trading average is $3.65-$6.67.

Milton, GA-based Exide Technologies (Nasdaq: XIDE, http://www.exide.com/) manufactures lead-acid batteries for transportation and industrial energy applications. A year ago XIDE was trading in the $7.50 range, but has been punished by investors for disappointing Wall Street. The stock closed June 4 at $2.35, up 6 cents on the day. Its market cap is $184 million and 52-week trading range is $2.22-$8.

Northville, MI-based Amerigon * (Nasdaq: ARGN, http://www.amerigon.com/) makes a heated and cooled seat system now featured in 54 vehicle models manufactured by Ford, GM, Hyundai, Toyota, Nissan, Land Rover and Jaguar, as well as a cupholder for Chrysler.  Amerigon, which recently announced the acquisition of its main competitor, W.E.T. Automotive Systems of Germany, dropped as low as $6 in 2010 and then ran up as to highs of more than $18 last summer. But the market downturn has hit ARGN and its now trading just off its 52-week low. It closed June 4 at $12.05, up 21 cents on the day. Market cap is $356 million and 52-week trading range is $11.41-$18.18.

Racine, WI-based Modine Manufacturing Company (NYSE: MOD, http://www.modine.com/) manufactures a variety of thermal management products including radiators, engine and transmission oil coolers for the auto industry. This is the stock that Seeking Alpha in November 2010 listed as one of “10 Stocks on the Upswing.” It’s been on a downswing for the past year, considering last July it was trading for about $16 and closed June 4 at $5.73, down 21 cents for the day. Market cap is now $267 million, 52-week trading range is $5.67-$16.02.

* Denotes client of Allen & Caron, publisher of this blog

Looking for Silver Linings in Small Cap Energy Storage/Electric Power Market

All of us at Smallcapworld are optimists at heart, so when it’s time to write about battery companies, we look for the good story lines. It’s a “glass half full” philosophy.

PbC batteries courtesy Axion Power International

For that reason we are temporarily ignoring lithium ion battery maker A123 Systems (Nasdaq: AONE), which on May 11 posted a first quarter net loss of $125 million, more than twice the loss it reported in  the fourth quarter of 2011 and the first quarter a year ago. Quality problems and a slack demand for electrical cars are mostly the blame, according to press statements.

Perhaps we can put another lithium ion technology company, Valence Technology (Nasdaq: VLNC), in the same category, being that it is trading at the very bottom of its 52-week range (67 cents as of May 14 with upper end of range $1.34) for many of the same reasons as A123. As optimists, however, we might argue that these low valuations (A123 closed May 14 at 91 cents and was as high as $6.20 last June) may be good bargains. We shall see. If you want to know more about VLNC, listen to the company results conference call May 23 at www.valence.com).

So where are some silver linings in the small cap energy storage/battery market? Here are a few randomly chosen companies where you might find some hope:

San Diego-based Maxwell Technologies (Nasdaq: MXWL, http://www.maxwell.com) makes ultracapacitors and high voltage capacitors that provide energy storage and power delivery solutions for applications in many industries including transportation, automotive, information technology, renewable energy and industrial electronics. It also makes microelectronic products for satellites and spacecraft. While management reduced sales growth guidance durings its earnings call May 9, four insiders bought 48,000 shares at prices between $9 and $10.20, suggesting perhaps that they thought it was a good buy, according to Renewableenergyworld.com.  (http://www.renewableenergyworld.com/rea/news/article/2012/05/maxwell-technologies-mxwl-buy-or-steal). Market cap is about $233 million, 52-week range is $8.62-$21.49. MXWL closed May 15 at $8.26, up 21 cents for the day.

Reading, PA-based EnerSys (NYSE: ENS, http://www.enersysinc.com) is a little big for our blog (market cap is $1.52 billion) but we’re looking everywhere for some good news. We found it at Motley Fool (http://www.fool.com/investing/general/2012/04/10/1-reason-to-expect-big-things-from-enersys.aspx) which apparently believes that ENS inventory levels indicate the company may see increased demand on the horizon. ENS makes industrial batteries, battery accessories, chargers and power equipment. Its 52-week trading range is $17.35-$36.51. Daily trading volume is about 390,000 shares a day. It closed May 15 at $31.44, down 32 cents on the day.

Newark, NY-based Ultralife Corp. (Nasadaq: ULBI, http://www.ultralifecorp.com) operates in three segments: Battery and Energy Products, Communications Systems, and Energy Services. It makes a lithium 9-volt battery as well as various other rechargeable and non-rechargeable batteries. Management confirmed its previous guidance of year-over-year revenue growth “approaching double digits,” according to Reuters. ULBI has a market cap of about $74 million and its 52-week trading range is $3.88-$5.50. It closed trading May 15 at $4.16, down 30 cents for the day.

New Castle, PA-based Axion Power International * (OTCBB: AXPW.OB, http://www.axionpower.com/) manufactures high-performance, low-cost lead-carbon (PbC(R)) batteries for a variety of markets, including for “mild” and “micro” hybrid vehicles, which are anticipated to be the commonest form of hybrid in the US within a couple of years (and already the most common in Europe). Its PbC batteries are as easy to manufacture as the older lead-acid batteries, but they use activated carbon instead of half the lead.  They are lighter and 100% recyclable (unlike lithium ion batteries), and have a higher charge acceptance and faster recharging rates, making them ideal for the growing  micro-hybrid and mild hybrid markets.  AXPW announced in April that Norfolk Southern had placed an initial order for the company’s PbC batteries for a battery-powered locomotive. AXPW has a market cap of $46 million and a 52-week trading range of $0.25-$0.84. It closed May 15 at $0.38, down 4 cents for the day.

Danbury, CT-based FuelCell Energy Inc. (Nasdaq: FCEL, http://www.fuelcellenergy.com) makes high temperature fuel cells for clean electric power generation. FCEL sells its products to electric utilities, independent power producers, universities, waste treatment facilities and other customers. The company has posted three consecutive quarters with “positive gross margins, revenue that beat expectation and a strong backlog, according to Seeking Alpha (http://seekingalpha.com/article/546321-fuelcell-energy-strong-quarter-and-a-shot-at-fuel-cell-profitability?source=yahoo). FCEL has a market cap of $151 million and a 52-week trading range of $0.80-$1.97. It closed May 15 at $1.09, up 5 cents for the day.

* Denotes client of Allen & Caron Inc., publisher of this blog