Deep Value Contrarian Investment Strategist Finds Clean Tech Winner

• On 10:57 am EDT, Wednesday October 28, 2009

67 WALL STREET, New York - October 28, 2009 - The Wall Street Transcript has recently published its TWST Large Cap Value Report offering a timely review of the sector to serious investors and industry executives. This 62 page feature contains expert industry commentary through in-depth interviews with award winning Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Price to Earnings -- Relative Valuation -- Free Cash Flow -- Cheap Valuations -- Improving Products -- Company Transparency -- Short Term Performance -- Diversification -- Auto Industry -- Risk Management -- Large Cap Value Fund -- Acquisition -- Profits -- Revenue Growth -- Aggressive Cost Cuts -- Cable Industry -- Capital Base -- Credit Downturn -- Market Share -- Restructuring -- Change in Business Fundamentals -- Market Volatility -- New Opportunities -- Adding Value -- Technology Sector -- Technological Growth -- Credit Market -- Advantaged Economics -- Competitive Position -- Consumer Discretionary Exposure -- Flexibility -- Building Value -- Valuation -- Dividends -- Employment Normalization -- Profit Margins -- Focus on Middle Market

Companies include: Vodafone (VOD); SUPERVALU (SVU); Safeway (SWY); Kroger (KR); Microsoft (MSFT); American Express (AXP); AutoNation (AN); Goldman Sachs (GS); IBM (IBM); ConocoPhillips (COP); JPMorgan (JPM); PowerSecure (POWR); Innovative Solutions & Support (ISSC); Cablevision Systems (CVC); Viacom (VIA); Vivendi; Groupe Danone (BN:FP); Honeywell (HON); Crane (CR); BB&T (BBT); Aon (AOC); Caterpillar (CAT); Schering-Plough (SGP); Merck (MRK); JPMorgan (JPM); State Street (STT); Emerson Electric (EMR); Aetna (AET); Harris (HRS); Honda Motor (HMC); Symantec (SYMC); Magna International (MGA); Cisco Systems (CSCO); JPMorgan (JPM); American Express (AXP); Bank of America (BAC); Citigroup ©; Syngenta (SYT); MasterCard (MA); Monsanto (MON); Avon Products (AVP); Chesapeake Energy (CHK); Apollo Group (APOL); Automatic Data Processing (ADP); Colgate-Palmolive (CL); Berkshire Hathaway (BRK); Praxair (PX); Oracle (ORCL); Coach (COH); Jefferies Group (JEF); Granite Construction (GVA); Potash Corp. of Saskatchewan (POT); Schnitzer Steel Industries (SCHN)

In the following brief excerpt from just one of the in depth interviews the 62 page report, a top tier money manager discusses the outlook for the market and highlights his stock picks.

MICHAEL C. HEABERG is a Managing Director of Axiom Asset Management, LLC. Previously, he was a Vice President of UBS PaineWebber from 1995 to 2003 and a Financial Advisor at Prudential Securities from 1982 to 1995. He holds a BS in Business Administration from Vanderbilt University. He is a member of the CFA Society of Philadelphia.

TWST: I know that you are very strong on individual stock selection, but are there areas where you wanted to increase exposure and at the same time, areas where that you want to reduce that exposure?

Mr. Heaberg: We don't allocate our portfolios based on sectors and don't attempt to replicate any index with industry exposure. We generally stay away from industry groups that we don't understand and those with significant financial leverage. For example, fortunately we largely avoided the financial area because of the leverage involved there and because of some of the uncertainties that we saw. We also generally avoid businesses whose products we don't understand, like biotechnology - we don't understand the science involved and therefore don't feel qualified to make reasoned judgments on the product development strategies that these companies undertake. While we don't make "sector bets", our value orientation does lead us to own more industrial names and fewer consumer names than might be typical.

TWST: Would you be able to tell us about some of the companies that you have found attractive in this environment and the reasons why?

Mr. Heaberg: The number of attractive securities we are seeing right now is relatively limited. In the past, this has been a pretty good leading indicator of the market's direction. When we have a long list of securities that are attractive, we tend to feel better about the markets - when we can't find securities that are attractively priced, we become more cautious.

A couple of things that we like, one of them is a name that I have mentioned last year. The name of the company is PowerSecure (POWR). Their primary business is power management for businesses and utilities. Their largest product segment by revenues is Distributed Generation where they will take a generating system with smart switchgear, that's remotely monitored. Their systems offer two benefits to a business user or to a utility customer. First, the generator is available to help save power costs at peak times. For example, on a 95-degree day in the middle of August at 3 o'clock in the afternoon, the local utility is charging a premium rate for their power because there is so much demand and this system allows the customer to use the generating capacity they have to satisfy some of their need for electricity. Rather than buying power from the grid, they are using their own generator to provide some of their power needs and there is a cost saving there. The other benefit of this system is it provides the user with back-up power, so that in the event of a power outage, they have a source for power to keep their operations running. Their largest customer, which has installed PowerSecure systems across their stores in Florida, is Publix Supermarkets, where because of the weather issues in Florida, particularly hurricanes, having back-up power is particularly needed. In the supermarket business, if all of a sudden you get an outage, you can start to lose food, within several hours. Distributed Generation is their largest business segment.

Another business segment they have developed, which is growing very fast and is exciting, is a series of LED lighting products, called EfficientLights. Their first product is a replacement for the fluorescent lighting in refrigerated cases within supermarkets, drugstores and convenience stores. In the first half of 2008, that business was doing about $400,000 per quarter in sales. In the second half of 2008, it was doing about $900,000 per quarter in business. In the first quarter of 2009, it did $2.2 million and in the second quarter of 2009, they did $4.6 million. In a little over a year, EfficientLights revenue has grown by ten-fold. They have developed another new product, an LED streetlight and have provided prototypes of this device to electric utilities for testing. They see this as a very large opportunity. There are 35 million streetlights installed in United States and this product could get stimulus money. They expect that this product will generate revenues in the next six to nine months. The stock is attractively priced. At this price, it's selling for less than a $100 million. The company is profitable. They have more than a dollar share in cash and no long-term debt. They have adequate financing and this is one of the opportunities that we see in the current market.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 62 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

For Information on subscribing to The Wall Street Transcript, please call 800/246-7673

Buzz up!