Wednesday, September 25, 2013

Seeking Alpha: The Hurry-Up-And-Wait Continues At Maxwell

Many years spent in the market has taught me to be on guard whenever investors try to promote a story on the basis of technology that they call "disruptive", "world/game-changing" and so on. A quick look at the chart of Maxwell Technologies (MXWL) can show why - however game-changing ultracapacitor technology may prove to be, these are still very early days for the technology and the stock has chopped back and forth between $5 and $20 for almost 15 years after previously enjoying a roughly three-year run between $20 and $40.

There are plenty of criticisms you can level at Maxwell. The company has failed to keep its nose clean, with a DOJ deferred prosecution agreement over a bribery scandal and a more recent accounting scandal tied to revenue recognition practices. It's also true that the company has struggled to secure meaningful commercial adoption outside of China's wind power and hybrid bus markets.

And yet, the company has lifted itself to positive free cash flow, has managed to generate positive operating income, and sports an accumulated deficit of $155 million. What's more, the company has convinced leading manufacturers like Continental AG and Caterpillar (CAT) to at least give their technology a try. By no means do I believe the odds favor Maxwell, but unlike many energy tech names, Maxwell's valuation seems to at least factor in achievable expectations.

Continue to the full article here:
The Hurry-Up-And-Wait Continues At Maxwell

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