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.
Ascent Solar Technologies (ASTI:Nasdaq)
, a publicly traded solar power company, received an additional $5.0 million from
institutional investor Ironridge Technology, thereby completing a $10 million
Series B Preferred Stock investment. AST,
based in Thornton, Colorado, has emerged as a leader in the development of
flexible, thin, high-performance solar panels.
order to examine AST within an industrial context, a profile of the solar power
industry is necessary: according to sources such as Time and E&E Publishing,
the industry has experienced record levels of popularity in the United States
in the last few years. Indeed, a report published by the Solar Energy
Industries Association and partner GTM Research demonstrates that the industry
has grown by a whopping 41 percent in 2013 alone, citing record levels of
installations in the utility sector. Moreover, solar electric installations
continue to increase in value – from $8.6 billion in 2011 to $11.5 billion in
2012 to $13.7 billion in 2013.
has driven this industrial surge? The report names decreasing prices spurred by
technological advancements in the field of solar energy: the average price of a
solar panel has declined by 60 percent in the past three years, and the
national average photovoltaic installed system price declined by 15 percent in
this in mind, what role does AST play in the development of the solar power
industry? AST uses substrate materials in its creation of photovoltaic modules,
which causes them to be exceptionally flexible, thin, and affordable. These
modules can then be implemented in the manufacture of traditional solar panels,
building materials, and consumer electronics. Thus, AST is one of several solar
power companies that, by decreasing the price of solar energy products, have
contributed to their increasing availability, consumption, and production.
does AST plan to use Ironridge Technology Co.’s investment? It seems that the
funds will go largely to marketing efforts: aside from the proceeds that will
be used to finance ongoing operations, the funds will be used to develop the Enerplex
brand. Enerplex of one of AST’s projects, which involves the implementation of
AST’s solar panel technology into everyday appliances
including phone cases, chargers, and battery packs.
does the future hold for the solar power industry? It’s hard to say. There is
the obvious: the United States solar industry has experienced unprecedented
growth in recent years and is currently the second-largest source of new
electricity generating capacity in the nation; but is the situation really so
simple? Every year, tax breaks for renewable energy expire – these expirations
are bound to adversely impact the industry. The cost of solar power is hardly
certain: because a significant portion of the diminishing costs of solar panel
manufacture is due to imports from China – which installed of 12 gigawatts of
solar capacity in 2013 alone – experts fear an upcoming “trade war”
characterized by taxes and rising prices. Clearly, the future of the solar power
industry is no safe bet – or at least not as safe as current conditions
AST a reliable investment opportunity? There can be no doubt of the strength of
the company’s product – indeed, its unique CIGS technology has been listed
among the top inventions of 2010 and 2011 by both Time and R&D Magazines.
Moreover, in the month since Ironridge Technology’s investment, investors have
enjoyed a 13.85 percent return on their investments. Within a larger time
frame, though, this positive return rate is misleadingly optimistic: since
2008, return rates have plummeted by almost 90 percent, and have barely changed
between 2013 and 2014. Despite the obvious innovation of AST’s technology, the
company itself doesn’t seem to be going anywhere fast – especially when one
considers the uncertain future of the solar power industry.
Our guest author, Brandon
Qureshi is a student at Columbia University, majoring in economics. He has a
particular interest in alternative energy topics and has devoted some of his
recent academic projects to the economics of new energy sources.
Neither the author
of the Small
Cap Strategist web log, Crystal Equity
Research nor its affiliates have a beneficial interest in the companies