Tag - LMT

Yesterday, after Energy Conversion Devices (Nasdaq:ENER) put in a solid 15% move, I suggested that we put solar stocks on our radar. I should have thrown a wider net, though. There are no solar stocks on the Top Daily Gainers list today. But there were several alternative energy stocks making large moves.

BioFuel Energy (Nasdaq:BIOF) was up 18% and Clean Diesel Technologies (Nasdaq:CDTI) was up 15%. But by far the big winner was Ocean Power Technologies (Nasdaq:OPTT). Ocean Power shares were up as much as 85% after it announced a joint venture with Lockheed Martin (NYSE:LMT) to develop its PowerBuoy for utility-scale power generation.

If you haven't read about this technology, it's pretty neat stuff. The buoys contain hydraulics that are moved by ocean waves to create electricity that's transferred by power cable to shore. The company claims it can build a 10 megawatt power station that would cover 30 acres of ocean and provide power for 4,000 homes. And the company believes they can create a 100 megawatt power station by adding more buoys...

Small-cap shares are expected to open higher, lifted by overseas gains in Europe and a stronger-than-forecast housing starts report that caused S&P 500 futures to rise about two handles. If the Russell 2000 (NYSE:IWM) matches the percentage climb in large-cap index products, then small caps should open near 745.

April housing starts were reported at an annual rate of 1.03 million units, up from 954,000 in March, and well above the forecast for 940,000. Permits also topped the analyst prediction.

Equity market overseas should be a supportive element in play for U.S. stocks this morning. European shares climbed to four-month highs overnight, rising about 1% on improved earnings outlooks and merger activity. Asia stock index products were mixed, with Japan down 0.2% and China down 0.3%

Crude oil futures jumped higher overnight, which could bolster some energy shares. However, rising crude oil prices remain a big concern for the overall market health because consumer pocketbooks are already stressed by record high pump . . .

Lately the broader markets have been a bit grounded. The Dow finished down for the month of December for only the third time in eleven years. The 3.5% return that the S&P 500 posted in 2007 left much still to be desired. Not to mention the fact that the Russell 2000 fell to 15-month lows earlier this week. However, one segment of the market that’s been taking off has been the aerospace and defense sector. The Dow Jones U.S. Select Aerospace & Defense Index posted a mighty return of 28.2% in 2007. 

One small cap that’s been leading the boom is Ducommun Incorporated (NYSE: DCO). And the results that this Carson, Calif.-based company have posted have been anything but common. At a market cap of just $331 million, the company struck it rich in 2007. Ducommun’s stock soared nearly 67% last year.

Founded in 1849 at the height of the Gold Rush, Ducommun is the oldest continuously operating business in Los Angeles. Back then the company repaired watches for prospectors. Today it engineers and manufactures components and assemblies for commercial aircraft, military aircraft and space programs.

A prominent example of Ducommun’s work is its support for a subsidiary of United Technologies Corporation (NYSE: UTX), which manufactures the Black Hawk helicopter for the military. In November, Ducommun locked up a five-year, $60 million deal to provide titanium erosion shields for the helicopter program. The shields are designed to protect the Black Hawk’s main rotor blades. Some of the company’s other major customers include the U.S. government, The Boeing Company (NYSE: BA), Lockheed Martin Corporation (NYSE: LMT), and Raytheon Company (NYSE: RTN).

The Black Hawk contract win is reminiscent of the wave of success that Ducommun has had recently. For the third-quarter ended Sept. 29, management reported net income of $5.8 million, or $0.55 per diluted share on $94.7 million in sales. These figures handily topped analysts polled by Thomson Financial, who were expecting EPS of $0.45 per share on $90.6 million in sales. The results also represented a 42.3% increase in net income and a 16.1% increase in sales versus the year-ago quarter.

Worldwide use of wireless communications is expanding rapidly.

According to a telecommunications industry report, in 2006, the U.S. corporate, government and educational sectors spent nearly $9 billion on deploying wireless networks. Expenditures are estimated to be growing 25% per year. Spending in the international market was estimated at $28 billion last year and is estimated to be growing 33% annually. A report issued by The Cellular Telecommunications & Internet Association indicates that wireless carriers spent $33 billion on capital investments and expenditures last year and are increasing spending at a 14% annual rate.

Carrier investments are driven by explosive growth in the number of wireless users; in June 2006 (the latest period for which data were available), there were approximately 219 million wireless subscribers in the United States, up 25 million, or 13% from a year earlier.

Increasing demand for wireless networks is attributable to the improved security of wireless data transmissions, the introduction of new, more advanced technologies, greater accessibility and affordability of wireless mobile devices, and expanding capacity of wireless networks, making wireless an acceptable alternative to land lines.

The advantages of wireless communications versus traditional land line networks include:

• Mobility. Mobile communications allow data to be transmitted from remote staff and locations not accessible by land lines. As a result, data collection costs are reduced, access to data and data controls improves and worker productivity climbs. 
• Capacity. Current technology allows wireless transmissions with capacity, quality and reliability superior to land line and comparable to fiber optic networks.
• Cost. Wireless networks are much less expensive than land lines to deploy and operate. In addition, wireless equipment costs are declining as a result of technology advances and production volume increases. In addition, wireless networks bypass local service providers, eliminating recurring monthly fees.
• Deployment. Wireless networks eliminate the need for negotiating rights of way, infrastructure engineering and additional FCC licensing. They can be deployed quickly and inexpensively.

Two small caps that are benefiting from wireless demand are WPCS International Inc. (Nasdaq: WPCS) and Anaren, Inc. (Nasdaq: ANEN).

The Russell 2000 index and the Dow are trending in negative territory this afternoon, while the price of oil has risen. At 2:57 ET the Russell 2000 had lost 1.91 points, or 0.23%, to 846.28. The Dow Jones Industrial Average was down 10.24 points, or 0.08%, to 13,629.24.

Shares of Ceragon Networks Ltd. (Nasdaq: CRNT) are trading higher following news that an analyst has raised the target price of the Israeli developer of point-to-point wireless backhaul solutions. Investment bank C.E. Unterberg, Towbin has reiterated its “Buy” rating and set the stock’s target price at $14, according to news reports before the start of trading. “We believe our estimate for 19% growth in 2008 will prove very conservative and believe the company can continue to outperform street expectations,” the financial services firm wrote in its review.

I begin this column with an emphatic warning: Ascent Solar Technologies
(Nasdaq: ASTI) is a very high-risk speculation. Ascent has been a public company only since August 2006, it has a tiny market cap of $50 million, its stock has more than doubled in the past month and intraday swings of 10% or more are not uncommon.

Despite these caveats, Ascent -- a maker of thin-film photovoltaic materials -- is an intriguing situation that has caught the attention of two very savvy market advisors.

In his Coolcat Report, Kevin Kennedy focuses on small cap, high growth situations that have shown strong technical momentum.

Says Kennedy: "Ascent Solar was formed in October 2005 to commercialize thin film photovoltaic technology. Armed with increased funding from the government to develop photovoltaic cells for use in solar energy projects and a recent investment from Norwegian giant Norsk Hydro (NYSE: NHY), the tiny company saw its shares rise 89% on March 14."

Norsk Hydro, Kennedy explains, acquired 1.6 million shares of Ascent Solar at $5.77 a share in a private placement as the "precursor to a strategic relationship between the parties." The shares purchased, he notes, represent about 23% of the total shares issued and outstanding after the sale.