We have maintained our Outperform recommendation on
Maxwell Technologies, Inc.
) on Jun 25, 2013.
Why the Reiteration?
Maxwell Technologies continues to be the market leader in the
growing ultracapacitor market. The company recorded consistent
growth in its top-line over the last three years.
Looking ahead, we expect the trend to continue with demand for
the company's products in utility infrastructure, renewable
energy, and space programs. Also, its key end-markets are likely
to benefit from government stimulus programs as well as more
stringent automotive emissions legislation.
Despite the recent notification letter from NASDAQ that the
company is not in compliance with NASDAQ Listing Rule 5250, we
remain optimistic as the company continues to monitor
ultracapacitor demand indications and intends to adjust its
operating plans accordingly.
The company is installing an ultracapacitor electrode
fabrication line in the company's 123,000 square-foot leased
facility in Peoria, Ariz. It expects this to double the current
electrode production capacity, once it comes online this year.
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Going forward, we expect the growth for Maxwell Technologies to
be powered by sales of ultra capacitors to support efficient,
cost-effective energy storage for recuperative braking systems in
low-emission, hybrid electric transit buses, zero-emission
electric rail vehicles and wind turbine blade fit systems.
Also, we are encouraged by the company's strong balance sheet
with a low long-term debt-to-capitalization of 2.6% as compared
to the Zacks Industry Average of 32.4%.
Other Stocks to Consider
Maxwell Technologies currently has a Zacks Rank #1 (Strong Buy).
Other stocks that are also well placed in the space are
LightPath Technologies, Inc.
AU Optronics Corp.
). While LightPath Technologies and Stoneridge Inc. carry a Zacks
Rank #1 (Strong Buy), AU Optronics Corp. carries a Zacks Rank #2