Tuesday, March 6, 2012

Green Transportation Penny Stock

Demand for electric cars is nowhere near that of traditional gasoline or diesel vehicles; there still is a niche market that is purchasing these vehicles. Enova Systems is not in the production of electric or hybrid cars but they do produce certain components used in manufacturing to increase gasoline efficiency and lower emissions. This company is positioned in a industry that will see trillions of dollars invested in the next five years from governments across the world.

Enova Systems Inc (ENA)
Current Price: 0.38
52 Week Range: 0.13 - 1.65
Market Cap: 11.50M

This Penny Stock produces drive system technology that bolts on post-transmission to improve fuel efficiency and lower emissions.  Third party testing has shown their drive system technology to lower emissions 35% to 70% and fuel reduction on average of 37%. Because of the ease in installation and cost saving potential this penny stock could see strong growth in the next five years.

 This penny stock has had little revenue growth  but their earnings are near a point where a good quarter or two could push them into positive territory giving the company much needed free cash flow for growth. One thing interesting to note, the company's TTM revenue is around $10M and their market cap is $11.5M so their Price to Sales ratio is very attractive at 1.1.

It appears their main focus is on larger sized vehicles such as buses and trucks. I see a lot of potential for non profit organizations using their product such as public hospitals and school districts due to the fact our federal government is very concerned with lowering emissions and green technology. From 2010 through 2016 manufacturers will have even stricter standards to meet or face fines and penalties for emission reduction and higher fuel economy.

Along with US spending on Green Technology, two of the highest populated nations in the world are increasing the amount they invest in a cleaner planet. India is planning on spending $70 billion by 2015 and China is going to invest $1.5 trillion over the next five years. If this penny stock can position itself to benefit from increased investment by national governments they could provide very high returns to their investors.

ENA has a strategic partnership with Ford,  they announced on January 24th a new contract to provide their drive systems to First Auto in China and continuing contracts with Smith Electric Vehicles. This penny stock will not be a get rich quick investment, it will probably involve a long term investment with a lot of volatility from quarter to quarter. But it will only take a few solid quarters to push this penny stock over $1.00 which would nearly triple your investment from today's price.

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  1. Theirs a company called cot corporation their a private label beverage company. Their line of products includes RC cola. Walmart is a major customer. I bought some of the stock at just 40 cents a share in 2009 today its trading at 6.50 the company does over 2 billion dollars in annual sales

    1. I know the company and have had their products growing up. Good pick hopefully you bought more than a few hundred bucks.

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