CRDN Ceradyne, Inc. (MM)

Maxwell Technologies Inc.'s (MXWL) ultracapacitors have found their way into a brand new area.

ShinMaywa Industries Ltd., a leading Japanese producer of special purpose trucks, designed Maxwell's BOOSTCAP ultracapacitors into an all-electric loading mechanism for garbage trucks that eliminates fuel consumption, carbon emissions and noise during loading and unloading.

Each truck's loading mechanism incorporates seven 48-volt BOOSTCAP ultracapacitor modules that charge from the energy regeneration brake, and store enough energy to power all-electric loading and unloading with the truck when the engine is not running.

This has opened up a new market for Maxwell's BOOSTCAP ultracapacitors. ShinMaywa estimates that using Ultracapacitors for electric loading reduces diesel fuel consumption by approximately 2,400 liters and carbon emissions by up to 6.4 tons per year compared with conventional garbage trucks.

Earlier, in February 2011, Maxwell reported fourth quarter 2010 adjusted earnings of 2 cents per share, missing the Zacks Consensus Estimate of 5 cents. The company had cash and cash equivalents of $39.8 million at the end of 2010 compared with $29.6 million at the end of 2009. Going forward, the Zacks Consensus Estimates for first quarter 2011 and fiscal year 2011 are currently at 5 cents per share and 36 cents per share, respectively.

Looking ahead, the company would see strong demand for its products related to utility infrastructure, renewable energy, public transportation and space programs. Additionally, its key end-markets appear to benefit from government stimulus programs as well as more stringent automotive emissions legislation.

However, in the near term, downside risks include the rate of penetration for ultracapacitor technology into broader markets, a higher cost structure for ultracapacitor production, R&D overheads and earnings dilutive equity issuances.

Maxwell Technologies presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock. In the near term, we would advise investors to focus on the Zacks #1 Rank (short-term Strong Buy rating) peers like China Digital TV Holding Co. Ltd. (STV) and Ceradyne Inc. (CRDN).

Based in San Diego, California, Maxwell is a leading developer and manufacturer of innovative, cost-effective energy storage and power delivery solutions. It develops, manufactures and markets energy storage and power delivery products for transportation, industrial telecommunications and other applications and microelectronic products for space and satellite applications.

 
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