Beacon Power (BCON – Nasdaq)
Dear Bottarelli Research Member,
As you probably know, the Fed’s surprise 50-basis point cut on Tuesday sparked one of the strongest single-day rallies in the last five years — and I truly believe that this event will be the catalyst that fuels a market rally from now until the end of the 2007 calendar year. You probably didn’t realize this, but the low volume that accompanied the market’s gains on Tuesday and Wednesday told me that these rallies were driven from nothing more than short covering.Can you imagine what type of gains we’ll see when new buyers come in?
With Wall Street now confident in the Fed’s ability to be proactive about helping any credit, housing, or interest rate concerns, Bryan and I both believe that we’ll make more money in the next three months than we’ve made all year long. This is fantastic news for our small-cap positions. In fact, we’re beginning to see some recent picks hit new 52-week highs, and all signs indicate that this upside momentum will continue for the next three months — at least! So let’s dive right into our latest pick!
The company I’m recommending today is one that I have had my eye on for quite some time. With all the lingering problems with our country’s aging and inconsistent power grids, this company’s technology (which was once nothing more than a fantasy application) has now been tested and proven — which means that after 3 long years, a worldwide launch is finally ready to get underway.
The company uses patented “flywheel” technology to store energy — and to use this stored energy whenever necessary. Just last week (September 12th to be exact) they announced that they had successfully completed all of the critical performance tests on their Smart Energy 25 flywheel, so now they’re able to move forward and build the first 10 commercial flywheel units. This is a major accomplishment for this promising little company.
And since they’re expecting such a large demand, they’ll be moving into new headquarters and doubling the size of their manufacturing facility in October. Plus, as this technology moves quickly towards commercialization, they’re also well financed thanks to a new $10 million commitment.
The stock had a huge run in mid June and early July as momentum traders ran it up hard. But it has since pulled back, and now it just gave me the same bullish buy trigger that I used to recommend WorldWater & Power (WWAT.OB) on June 4th for $0.89 per share. As you know, WWAT has traded as high as 182% above our entry price, so it’s definitely time to establish an entry position in this company now!
The stock is Beacon Power (BCON – NASDAQ) and let’s add a small position at or under $1.90 per share. If we’re patient — and we allow this company to launch their first-ever flywheel technology — I think we’ll be handsomely rewarded.
UPDATES
Yellowcake Mining (YCKM.OB): They’ve now completed a 40 drill hole exploratory program, and the results will be out this winter. Although YCKM has pulled back with the rest of the uranium sector, I’m still bullish as they move into the next production phase with Strathmore.
WorldWater & Power (WWAT.OB): More bullish news! To execute their projects in the U.S. and overseas, they’ve tripled the amount of engineers on staff — and they’re also moving into new headquarters. Without a doubt, WWAT is in the early stages of maturing into one of the most desired solar plays out there, so continue to hold your position for more gains.
Uranium Resources (URRE – NASDAQ): With oil prices breaking through $80 per barrel, nuclear plants are making more and more sense — and that simply means that more “yellow cake” is needed to make them operational. After reporting earnings that quadrupled last month, I’m still bullish as ever.
Torrent Energy (TREN.OB): I urge you to take advantage of this dip, because the rewards could be staggering yet the risk is next to nothing. If you listened to their recent Web cast, then you heard it for yourself: They’re currently in talks with a major player, and it’s just a mater of time before we hear news of a buyout. Mark my words, the day that something is announced, you’ll be glad that you own these shares.
Melco PBL Entertainment (MPEL – NASDAQ): Bryan brought to my attention the price action of Las Vegas Sands (LVS – NYSE) and Wynn Resorts (WYNN – NASDAQ) this week. In short, LVS and WYNN are each blasting off on the news that LVS successfully opened their casino in Macau. This could be the same type of explosive upside action we see in MPEL, so I continue to remain bullish as China gets set to host the Olympics.
Boots & Coots International Well Control (WEL – AMEX): I hate to say it, but it’s time to throw in the towel on this one. Even as the company reports strong numbers, the stock has been unable to gain any upside momentum. And since the stock is not responding to my chart patterns, let’s rid ourselves of it and move on. Sell.
Sinovac Biotech (SVA – AMEX): On a much better note, SVA has just established a new high for the year. We’re sitting on a very nice 49% gain in under a month, and I expect to see more upside as we enter flu season. If this one hits 50% gains next week on an intra-day basis, I’d look to take half of your profits off the table.
Skins (SKNN.OB): Even more fantastic news! The initial sales of Skins have exceeded company expectations, and the stock popped 18% yesterday on the good news. Their “Skins and Bones” footwear are selling out everywhere, officially making this new footwear innovation “on fire.” I can’t wait for the Christmas season to confirm what Bryan and I think about this little gem. We’re certainly in on the ground floor, so you can look forward to more gains to come!
On that note, I’ll turn things over to Bryan. But before I go, let me quickly address a very important recommendation that Bryan made to his Bottarelli Research Options readers…
When we look back 2 or 3 years from now, I’ll bet you’ll conclude that Tuesday’s 50-basis point Fed cut officially marked the beginning of the turnaround for homebuilder stocks. As an opportunistic way to capitalize on this, Bryan has developed a powerful trade that allows you to profit off any U.S. housing rebound between now and 2010. That gives you three full years to witness a turnaround! And best of all, you’re only paying pennies on the dollar to make this play! Speaking as a homebuilder myself, I urge you to get into this position. As always, Bryan is right on the money here, so be sure to review this opportunity to make 200% or 300% in Bryan’s “P.S.” section below.
Have a great week!
Sincerely,
“The Next Generation Power Grid” For Only $1.90 Per Share
Since 2002, Beacon Employees Have Taken Bonuses in Stock Rather Than in Cash
Founded in 1997 and based in Wilmington, Massachusetts, Beacon Power (BCON – NASDAQ) develops “flywheel” devices that store and transmit kinetic energy.
SCIENTIFIC NOTE: Kinetic energy is defined as “the extra energy which an object possesses due to its motion.”
Energy experts all agree that any technology that can store electricity in a high-density, rotating flywheel could be extremely useful for electrical grids across the country. Why? Because whenever there is a power loss, Beacon’s flywheel technology acts as a backup generator, helping the power grid balance and regulate the inevitable supply/demand imbalances without having to adjust power output. Maintaining a constant and consistent energy level — without experiencing extreme peaks and valleys — offers big power plants tremendous relief to operational strains and pressures, leading directly to cost savings. What’s more, since Beacon makes storage systems, they can utilize intermittent renewable energy sources like sun and wind, providing reliable and emissions-free electrical generation.
Perhaps it sounds confusing, but a 30-second presentation on the company’s Web site does a good job of explaining this sophisticated technology. To view this short presentation, click the link below:
http://beaconpower.com/flywheelspresentation.htm
To store and transmit energy in the event of a grid outage, Beacon Power offers two “Smart Power” products designed to deliver instantaneous power. One comes from solar energy, and the other comes from battery backup, detailed below:
Product #1 — Smart Energy Matrix: Housed in transportable shipping containers, Beacon’s Smart Energy Matrix is a compact regulation system that could be located nearly anywhere on a power grid.
The flywheels are basically energy machines, or mechanical batteries, that deliver power whenever needed. Since the flywheels are about 85% efficient, only 15% of the power they absorb is used to keep them running. And despite the fact that they’re spinning at 22,000 rpm, the only sound you’ll hear when standing beside the flywheel is the fan used to cool the electronic equipment inside. Scale-power versions have already been approved for use in California and New York — with many more states to follow.
Product #2 — Solar Inverter Systems: Beacon’s newest innovation is a family of battery backup photovoltaic power conversion systems that offer high efficiency and reliability for grid-connect applications. These solar systems are a nice complement to Beacon’s SEM technology — and that leads directly into the real investment opportunity offered here…
INVESTMENT TRIGGER: Up until now, Beacon’s technology has been nothing more than a conceptual idea. But now that’s all about to change.
You see, on September 12th Beacon successfully completed a series of critical tests on their Smart Energy 25 Flywheel system. The critical tests that the flywheel passed included “lift-circuit failure testing,” which involves powering the Smart Energy 25 system up to its top speed of 16,000 rpm and then disabling power. Under this extreme condition, the components that Beacon designed were successful in bringing the flywheel to a full and safe stop. Further testing also confirmed great performance of the flywheel, including the availability of 25 kilowatt-hours of stored energy.
By successfully passing all of these critical performance tests, this means that Beacon is now clear to move forward and build their first 10 commercial flywheel units. This is a major accomplishment for this emerging company.
In fact, according to Beacon president and CEO Bill Capp, “This is a tremendous accomplishment by our engineering team, representing thousands of hours of design, development and testing. With this important safety milestone successfully completed and our redesign thus validated, we are moving ahead to build our first commercial units. We expect these initial Smart Energy 25 systems to be running in our new manufacturing plant in Tyngsboro, Massachusetts, by the end of January 2008, before being grid-connected at our first commercial frequency regulation facility in April 2008.”
When Beacon announced that their tests were successful, the news helped shares jump 15% in one day. But this is just the beginning. In Q1 of 2008, Beacon expects to install their first commercial scale flywheel-based frequency regulation system in one of three grid territories: New York, California or a territory that serves the Mid-Atlantic and Midwest. After this, you can expect to see a rapid scale-up in Beacon’s business, with a number of additional systems installed by the end of 2008. This is when the stock will really gain upside momentum.
Now please understand: Beacon Power is a development-stage company that’s now transitioning into manufacturing new products and developing its market niche. The stock has incurred losses since inception, and that’s why shares currently trade for only $1.80.
But now that Beacon is ready to aggressively roll out their flywheel systems, you can expect Beacon’s revenues in 2008 to come in around $7.7 million, growing significantly to $33.9 million in 2009. This will result in a $0.15 loss in 2008 followed by a $0.01 profit in 2009.
Now I admit, that might not sound impressive, but remember: You’re investing on the ground floor of a stock that has the potential to outperform every power plant in the country with their flywheel systems. And looking at the management team that Beacon has assembled, you’ll see that they have some of the most qualified experts running the show. For example:
- CEO Bill Capp: Over 25 years experience with Ford and Ingersoll-Rand.
- CFO James Spiezio : Over 25 years experience with GE and United Technologies.
- CTO Matt Lazarewicz: Over 25 years experience with GE.
BUT EVEN MORE IMPORTANTLY: Since 2002, Beacon employees have taken bonuses in stock rather than in cash. This tells you that everyone associated with Beacon Power understands the company’s immense potential and is committed to the successful future of their business.
Speaking personally, I feel comfortable owning a company where the management team has such a vested interest in increasing their share price. That’s exactly what you have in Beacon Power.And it’s easy to see why company management is so excited about Beacon’s future.
Unlike clean technology sectors, the potential market for Beacon’s product is guaranteed. You see, power gird operators are obligated to take bids on any projects designed to meet federally-set reliability regulations — and now that their technology has been proven, Beacon will be able to rapidly scale up their business operations.
The company already received a $750,000 contract from the U.S. Department of Energy to develop 200 flywheels in a 20,000-square-foot building. They also received a $2 million contract from California and New York to develop two Smart Energy Matrix systems — which already demonstrated successful energy frequency regulation. And in November of 2005, they received an additional $15 million investment, followed up by a new $10 million investment by an un-named institutional investor on September 5th 2007.
With the company showing quarterly revenue growth of 114%, cash of $9.39 million (which does not include last week’s $10 million infusion) and zero debt, it’s easy to see why the stock has gained 45% over the last 52 weeks. But now that years of product testing have finally been proven successful, the stock is really set to begin an impressive advance. For only $1.90 per share, you have limited downside risk and enormous upside potential, so let’s add a small position to our small-cap ledger just as the company begins to roll out their much-needed technology. Each time the company books a new order, the stock will increase — and I’d like to participate in every upside move. So with that, here’s your newest small-cap pick…
PLAY: Buy shares of Beacon Power (BCON – NASDAQ) at or under $1.90, good for the week.
Sincerely,
P.S.As you know, Ben Bernanke cut interest rates by 50-basis points on Tuesday, which sparked a 335 point Dow rally.
MAKE NO MISTAKE: This Fed move will spark a market rally that lasts until the end of the 2007 calendar year. In fact, as Mark mentioned above, we expect to make more money in the next three months that we’ve made all year. Is this a bold claim? You bet! But right away, it’s paying immediate dividends.
You see, since the Fed cut interest rates three days ago, Bottarelli Research Options has been on fire — hitting winners on our last 7 trades. Add it up, and we’ve gained 307% over the last three days. See for yourself!
- 57.50% on BG October 100 Calls (BG JT)
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- 35.14% on US Steel October 105 Calls (X JA)
- 73.17% on GS October 200 Calls (GPY JT) *2nd Half
- 40.54% on NILE October 90 Calls (JWU JR)
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- 35.90% on CHL October 70 Calls (CHL JN)
If you’ve been thinking about super-charging your Bottarelli Research Small Cap membership and joining our elite options trading group, then right now is your best opportunity to come on board. The current market environment is ideal for explosive trading profits, and I want you with me every step of the way.
In fact, as Mark mentioned above, it’s still not too late to get into a play that I consider the very best way to capitalize on a U.S. housing rebound. If you think U.S. housing will rebound anytime between now and 2010, then you must make this play. It’s all available to you when you join Bottarelli Research Options, so click below to add this valuable service to your investment arsenal today:
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Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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