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Energy Conversion Devices (ENER)

Energy Conversion Devices (ENER). Griffin Voth 2-23-2006. Company Profile. Energy Conversion was co-founded by Stanford R. Ovshinsky and Iris M. Ovshinsky in 1960. Based in Rochester Hills, Michigan.

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Energy Conversion Devices (ENER)

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  1. Energy Conversion Devices (ENER) Griffin Voth 2-23-2006

  2. Company Profile • Energy Conversion was co-founded by Stanford R. Ovshinsky and Iris M. Ovshinsky in 1960. • Based in Rochester Hills, Michigan. • Engages in the invention, engineering, development, and commercialization of materials, products, and production technology in the fields of alternative energy technology and information technology. • 746 employees

  3. Product Offering • 3 business segments, 4 core commercial businesses • Competitive products: Photovoltaic (PV) Solar panels and nickel-metal-hydride (NiMH) batteries • FLASH memory replacement, Phase Change Memory • Fuel Cell development

  4. Financial Highlights

  5. Market Price $45.02 52 Week High: $57.84 Outperforming SPX by large amount. Trend Analysis

  6. Investment Pros • Recent presidential visit to Ovonics solar division touting future of solar technology. • Current energy costs • Zero Long term debt, and very little short term debt. • FLASH memory replacement.

  7. Investment Cons • Inconsistent Earnings • Negative Earnings • Old management

  8. Industry Profile

  9. Company Growth • Providing Batteries for Saturn VUE Green Line Hybrid SUV • Licensing Agreement with Samsung to Develop PCM (Phase Change Memory) • New 25Mw Facility • Further Capacity Planed • Changing Company Focus to Bring Commercialized Products to Market.

  10. Valuation Summary • Company Pays no Dividends • Inconsistent Earnings • Mean target price $51.33

  11. CAPM • Risk Free 4.606% • Mkt Premium 6.394% • E(r) 13.38% – 14.20%

  12. DCF Model

  13. Valuation Conclusion • Averaging 3 Sales forecasts (22%-28%) Yields $49.47 • Large Feasible Range • Dependent on Sales Strength

  14. Takeaways • Huge Potential • $13 Off 52 Week High • Good Time to Buy on Weakness • Buy Under $45

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