Oct 16 2012
Here is my recent investment PWER (Power One); one of the old dogs from California. Power-One, Inc. engages in sale, and service of power supply products for the renewable energy (RE), servers, storage and networking, telecommunications, industrials, and network power systems industries worldwide. Predominantly focusing its energy into solar invertors . Invertors are used to store the power for future usage similar to batteries.
This stock is currently under performing due to decrease in sales growth and concerns about German and Italian government support to solar projects. Recently they have entered into emerging markets like India where Solar power projects picking up speed.
Apart from the market conditions, PWER balance sheet looks very attractive. PWER is trading at six times earnings and has $2.00 in cash with no debt priced at $4.60 (as of now) . The price to book ratio is 1.25, and has generated $148 million in free cash , that is equivalent to $1.21 per share ( Trading just four times free cash flow).
Market is treating this company as if there is no hope in the future, but based on the numbers it should trade lot higher ( 15 time free cash is nominal for US stocks). Bottom line, in my opinion it has little downside risk and can be bought over by its rival firms or private equity firms .
For more financial details , check Reuters web site, here at http://www.reuters.com/finance/stocks/financialHighlights?symbol=PWER.O
Disclosure: I purchased this stock for long term at my Covestor portfolio. Please do your due diligence prior to purchasing any of my trades I discuss here.