Small Cap Strategist is published by Crystal Equity Research an independent research resource on small capitalization stocks. Follow along as we discuss the most recent trends in the small-cap sector, investigate interesting companies and pan a few not-so-promising stocks.
this year, we added metal air batteries and the companies who are working to
commercialize the technology on our list of promising acts to follow.The Israeli battery developer, Phinergy,
was added to our Mothers of Invention Index.Back when I wrote the post “More
in the Air than Spring” back in April 2013, Phinergy had attracted a
bit of attention for a road test of Citroen C1car outfitted with a
technology far different than conventional lithium ion.No one knows Phinergy.It is too small and too foreign to impress
U.S. investors.I did not expect anyone to
really pay much attention.
June 2013, a U.S. company with a very high profile was awarded a patent related
to metal air battery technology.This
has put the words ‘metal-air’ on the tongues of nearly every investor and
pundit across the country-electric sports car phenom Tesla Motors
(TSLA:Nasdaq).It seems quixotic for a small-fry like
Phinergy to chase after unproven battery technologies.However, when the arguably most financially
successful electric car producer in the country stakes a claim on the same
technology, it is time to take it seriously.
Tesla’s patent addresses the linkage of lithium-ion with metal-air batteries as
first and second battery packs for an electric car.This
is the same strategy that was being tested in the Citroen C1 by Phinergy.The idea is to extend the driving range by
making available a high energy intensity power source like the metal-air
battery that is better equipped for the long trip.
a stake metal-air battery technology is challenging for the minority investor,
especially U.S. investors.Phinergy is a
private, foreign company.Tesla has
publically traded stock but let's face it, the stock appears unaffordable at the current price level.A stake in IBM is a play on all manner of
technology and products, but batteries are a very small part of the bigger IBM
my April 2013 post I had offered Arotech
an alternative to play metal-air battery technology.Arotech is profitable and trades at 9.8 times
trailing earnings.The company has
concentrated on military applications for its rechargeable zinc-air battery
technology, selling the Soldier Wearable Integrated Power Equipment System
(SWIPES) to the U.S. DOD.Combined, its
lithium battery and zinc-air batteries and systems account for approximately
one-fourth of total sales. Earlier in
September Artotech raised $6.0 million through an underwritten offering of its
common stock.Expect acceleration in
Arotech’s development activity.More
likely Arotech will begin trolling for an acquisition that improves its
position in the military market.
battery technology still has a ways to go before it becomes common place.However, Arotech has proven it commercially
viable in a niche market.Phinergy and
apparently Tesla have proven it workable in the electric automobile.It is only a matter of time before the rough
edges are hammered out and a very large consumer car market becomes reality.
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of the Small
Cap Strategist web log, Crystal Equity
Research nor its affiliates have a beneficial interest in the companies