Ener1 (HEV) Gets Upgrade to Buy From MDB Capital

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09:11:01 pm on March 17, 2009

MDB Capital came out today and upgraded Ener1 (HEV) with a Buy rating and a price target of $5.50.  They believe the shares are compelling down at these levels due to the pipeline of potential customers including the possible reemergence of Think Global later in the year. 

“We are revising our earnings model and now anticipate revenues in 2009 of $41 million (roughly $28 million coming from Enertech) and $77.5 million in calendar 2010. With this revenue potential, we believe there is a high likelihood that the company could breakeven on a cash flow basis late in 2010 and as such deserves a higher valuation. In addition, there is a reasonable chance that the company could receive federal funding in the form of grants and low cost loans to aid in the financing of further capacity expansion.”

On December 16th with HEV trading at $7 I warned to stay out of the stock for awhile commenting:

“This news out of HEV doesn’t smell right to me.  They secure funding for operations through 09 but are shutting down for nearly 2 months just ahead of a large shipment to Th!nk while they seek additional funding?  I would stay out of this one for awhile, not only based on this news but due to the fact that the technicals have deteriorated.  The stock now trades below the 50 day moving average and is off about 30% over the past week after briefly touching all time highs. ”

Now, with the stock coming off the lows at $2.50 and surging 30% in the past 2 days, it’s time to put it back on the radar.  It’s still within a downtrend and carving out a new base, but if it gets back to the $2.50 – 3.00 it may be a compelling long term buy.

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