25% Market Share for Plug-Ins by 2020, Pessimism on Buffett’s Pick

Tickerspy’s Battery Index

BATTERY INVESTING IDEAS

• Popular long ideas: JCI, AONE, ABAT
• Popular short ideas: AONE, ABAT, PPO
• Top dividend plays: JCI
• Pro favorites: JCI, PPO, ENR

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BATTERY COVERAGE

This index focuses on firms with exposure to battery and energy storage technology used in everything from handheld devices to electricity grids

• A123 Soars As Morgan Stanley Sees Big Things Ahead (AONE, JCI, HEV, CBAK, BYDDF)
• A123 Gets the Goldman Seal of Approval (AONE, ALTI, XIDE, HEV, CRTP, AXPW, CBAK)
• Ener1 Easily Stands Out Among Battery Stocks (HEV, MXWL, VLNC, XIDE, JCI, ENS, PPO)

BATTERY CHART

BATTERY METRICS

Avg. Market Cap:	$2.4B
Avg. P/E Ratio:	15.8
Avg. Div Yield:	0.1%

Forecasting the potential proliferation of electric vehicles is a tricky task for investors.

When legendary value investor and Berkshire Hathaway (NYSE: BRK-A, BRK-B) CEO Warren Buffett talks, Wall Street listens. But when legions of like-minded money managers and individual investors follow his moves, it sometimes inflates stock prices beyond what Buffett would have been willing to pay in the first place.

On Tuesday, analyst Chardan Capital Market advised clients that the Buffett factor may have lifted Chinese electric carmaker and battery company BYD (OTC: BYDDF) too far, too fast. “It’s time to get off this bus,” Chardan explained, according to a report by Bloomberg. “Given that electric vehicles remain years away from gaining meaningful penetration, we would recommend investors take profits.”

So how far away is meaningful market share for electric vehicles? Certainly no one can be sure, but the Electrification Coalition offered its opinion earlier this week. According to AutoBlog, the coalition calls for plug-ins to make up 25% of the market by 2020. Given that some components of the Energy Storage and Battery Technology Stocks Index are members, the group’s outlook could be an optimistic one, but an interesting mix of other companies are also represented.

There are currently 13 Electrification Coalition members, seven of which are managers of U.S.-listed companies. Battery maker A123 (AONE) and global power solutions company Johnson Controls (JCI) are both represented, as are shipper FedEx (FDX), chemical company Rockwood Holdings (ROC), wind energy products firm AeroVironment (AVAV), and power companies NRG Energy (NRG) and PG&E (PCG). Nissan Motor Company CEO Carlos Ghosn is another notable member.

While it could be some time before electric cars are commonplace, there is a major push for their development underway. Among the takeaways from President Barack Obama’s recent China visit was a U.S.-China Electric Vehicles Initiative, which among other things calls for joint standards of development and public education projects.

Investors looking to capitalize on future developments in the electric car market can do so via a number of auto-oriented players in the Energy Storage and Battery Technology Stocks Index. As of this writing the majority of Index components have been discounted by double-digit percentages over the last month.

Tags: AONE, AVAV, BRK-A, BRK-B, BYDDF, FDX, JCI, NRG, PCG, ROC