For those who haven’t connected the dots, my “not coffee, but good from the last drop” trade is Maxwell Technologies (MXWL is ticker). They just reported blowout numbers, we think. See the company is in process of restatement and can only do “limited financials” till complete restatement is done. The company makes ultra capacitors, used for energy storage systems in transportation, wind, industrial, and electronic industries. Its a true industrial growth company with 20%+ REVENUE GROWTH. The estimated March quarter produced 20% revenue growth and 15 cents in eps, up over 100% from march of 2012. The stifle analyst estimates 2013 revenue of approaching $200 million and operating profits of around $.60 per share. I concur.
Right now the biggest biz is the china environmental play as the company has large revenue in chinese hybrid bus biz and windmills. Both areas are receiving government attention in order to reduce emissions and improve air quality. Large opportunities exist in light vehicles for stop-start systems to improve gas mileage and heavy duty trucks as ultracap/battery hybrid takes over from battery alone. Maxwell Technologies could double in 3 years and make 10-15% pretax margins. That’s $400 million revs and $1.50-$2.00 eps (co pays no taxes) for a $6 stock. Assuming the world economy holds together.
MXWL has hit $15 per share in 9 of the last 10 years, as investors pay big premium for 20%+ organic growth in the industrial/clean energy space. I can only speculate about the valuation once the company cleans up its financials and lawsuits from slime bag ambulance chasers. A 20 p/e is not unreasonable for a 20% revenue grower with net cash and a long runway for growth from new applications, as well as a ton of proprietary technology that makes them the lowest cost maker of product with few competitors.
I am hardly bullish. And, as all know, I haven’t been speculating much. But this opportunity is too good to pass up: a 20% secular revenue grower, with tons of IP, loaded with newly evolving cleaner, energy applications all for 7x’s my estimated 2014 profits and 5x’s ebitda. I should put this position away for 5 years and forget about it and the perilous macro.
Long MXWL.
Speak Your Mind