Energy Conversion Devices (ENER) looks forward to sunny days

Posted Feb 19th 2008 5:45PM by Joseph Lazzaro
Filed under: Stocks to Buy

The choppy, consolidating (or perhaps worse) market conditions sometimes give the impression that growth plays do not exist, but that is not the case. One growth company worth reviewing is Energy Conversion Devices (NASDAQ: ENER) . (Please note at the outset that Energy Conversion Devices is only for investors who can tolerate high risk.)

Energy Conversion Devices invents, designs, develops and commercializes materials, products and production processes for the alternative energy generation, energy storage and information technology markets.

Analysts expect F2008 revenue to more than double, with solar capacity increasing to 148 megawatts by the end of F2008, and to 200 megawatts by the end of F2009.

Analysts also see strong current and future demand for solar products, driven by ENER's thin-film solar technology. Thin film is superior to the current industry standard, polysilicon solar. The Reuters F2008/F2009 EPS consensus estimates for ENER are -$0.11/$1.01.

The risks? ENER remains vulnerable to a global economic slowdown, or a decrease in the price of the competing polysilicon-based technology.

The First Call mean rating for ENER is Buy (13 firms), the mean 2008 target is $36 (high: $44, low: $31).

Stock Analysis: Energy Conversion Devices is a high-risk stock not suitable for moderate-risk or low-risk investors. Investors with an investment horizon longer than three years should be rewarded from ENER's shares. Consider a stop loss of $16.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

Tags: alternative energy sources, ENER, energy, Energy Conversion Devices, polysilicon solar, solar, solar technology, thin film solar