Feb. 10, 2012
/PRNewswire/ -- Merriman Capital, Inc., a wholly owned subsidiary of Merriman Holdings, Inc. (OTCQX: MERR), initiated equity research coverage on Enova Systems, Inc. (NYSE-AMEX: ENA)
February 8, 2012
with a Buy rating.
Enova Systems is a clean technology company that focuses on the production and marketing of power management and conversion systems for the automotive industry.
, highlighted these themes in his initiation report:
- Green for Free (GFF) program will be a game-changer for Enova and the step van market. Enova formed an alliance with FCCC in November 2011 to initiate the GFF program under which FCCC's All-Electric Step Van chassis will be powered by Enova's Omni drive system. FCCC has a 90% market share of the U.S. and Canadian diesel-driven medium-duty commercial vehicle space with customers including UPS, FedEx, Cintas, and Aramark available to provide a ready market for the GFF program.
- Omni drive systems will put Enova on a different growth trajectory. Enova's Omni drive systems, which are compatible with a wide range of vehicle drive systems, are expected to generate more than 45% gross margins, boosting the overall gross margin of Enova to more than 35%. The Omni product line is comprised of the Omni Inverter, the Omni Charger, and the Omni DC/DC Converter.
- Enova has been steadily building up a customer portfolio. Enova was the first company to market a commercial PHEV, in 2006, and has successfully delivered more than 2,500 hybrid and electric systems globally, steadily building up its customer portfolio. The company has established relationships with some of the strongest brands in the automobile manufacturing industry, including Navistar, Smith Electric Vehicles, China-based First Auto Works (FAW), and Daimler Freightliner.
- Attractive valuation. We have arrived at a 12-month price target of $0.71 for Enova using average peer EV/Sales multiples, implying considerable upside from current levels. We feel that the GFF program will boost Enova's revenue in 2012 and 2013, through a combination of fresh orders, new customers, and preservation of existing relationships.
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Note to Investors
This press release contains certain forward-looking statements based on our current expectations, forecasts and assumptions that involve risks and uncertainties. This release does not constitute an offer to sell or a solicitation of offers to buy any securities of the Company. Forward-looking statements in this release are based on information available to us as of the date hereof. Our actual results may differ materially from those stated or implied in such forward-looking statements, due to risks and uncertainties associated with our business, which include the risk factors disclosed in our Form 10-K/A filed on April 28, 2011 and our Form 10-Q filed on November14, 2011. Forward-looking statements include statements regarding our expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," and "would" or similar words. We assume no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise. The Form 10-K/A filed on April 28, 2011 and 10-Q filed on November 14, 2011, together with this press release and the financial information contained herein, are available on our website, www.merrimanco.com. Please click on "Investor Relations."
This research has been prepared by Merriman Capital, Inc., a wholly owned subsidiary of Merriman Holdings, Inc. Some companies Merriman Capital, Inc. follows are emerging growth companies whose securities typically involve a higher degree of risk and more volatility than the securities of more established companies.