Analysts Bullish on Battery Stocks Ahead of Sector's Latest IPO

• By the tickerspy.com Staff
• On 12:33 pm EDT, Thursday September 10, 2009

As electric car interest grows, battery technology stocks have gotten more and more attention, most recently earning bullish sentiment from another analyst.

New battery technologies are used in everything from cell phones to fork lifts, and with a growing interest in electric transportation, a number of new investors have been drawn to the sector. Among those turning bullish on battery stocks is analyst Wedbush Morgan, which today initiated coverage of two Energy Storage and Battery Technology Stocks Index components.

Maxwell Technologies (NASDAQ: MXWL - News) was initiated with an Outperform rating at Wedbush Morgan, which cited the company's position for growth as well as near-term profitability. Maxwell's technologies have applications in everything from cars to consumer and industrial electronics.

Meanwhile, restructuring is the story for Milton, Georgia-based Exide Technologies (NASDAQ: XIDE - News), which was also initiated with an Outperform rating at Wedbush. Analyst Craig Irwin said, the company is, "well positioned to resume its successful restructuring with management's recent closure of plants in France and the U.K., and other actions matching production to lower unit demand." Thomas Weisel analyst Dilip Warrier also cited ongoing restructuring, upgrading the stock to Overweight from Market Weight.

According to The Wall Street Journal, A123 Systems could be the battery sector's next component. The company's IPO could be worth as much as $950 million based on the high end of the $8 to $9.50 per share terms set by underwriters.

As more automakers jump on the hybrid and electric car bandwagon, the importance of efficient and inexpensive battery technology will continue to grow. Toyota (NYSE: TM - News), Honda (NYSE: HMC - News), and Ford (NYSE: F - News) are already engaged in the hybrid market, and General Motors is hoping that the Chevy Volt will help it rebound from bankruptcy.

Investors looking to capitalize on further developments in battery technology can look to the Energy Storage and Battery Technology Stocks Index for idea generation applicable to various investment strategies. Components range from multi-billion dollar Johnson Controls (NYSE: JCI - News) to micro-cap plays Altair Nanotechnologies (NASDAQ: ALTI - News) and C&D Technologies (NYSE: CHP - News).

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