buffalonate (96.94)

A123 Systems Finally a Buy?

April 11, 2011 – Comments (2) | RELATED TICKERS: AONEQ

I think A123 Systems' stock(aone) is finally down to a price where it makes sense to buy.  Its market capitalization is less than three times its expected revenues for 2011 which seems like a decent value to me.  The analysts believe that this company will grow revenues by over 100% the next 2 years.  The DOE gave A123 Systems a grant to help build the largest lithium ion battery factory in the country.  The CEO says that they are not only relying on mass production to bring down costs but they are also investing significantly in production innovations to be more economical than their competitors.  They probably won't be profitable until 2013 but they have doubled capacity in the last year and I can't imagine that they would do that if they didn't see the product being economically viable in the near future.  They recently announced in their quarterly report that they will be supplying batteries for a start-stop hybrid system for one of the big three auto companies in 2013.  Here is the link. http://blogs.edmunds.com/greencaradvisor/2011/03/automakers-doe-tap-a123-to-develop-smaller-battery-for-hybrids.html  The CEO also seems very optimistic about the demand for their product and their ability to bring down costs as you can see from this interview.  http://www.just-auto.com/interview/qa-with-a123-systems_id108513.aspx  I can't guarantee this stock won't go lower in the short-term but for the long-term I really like their future.