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Thread: Seekiing Opinions on a 'New Economy' Stock Investment

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    Default Seekiing Opinions on a 'New Economy' Stock Investment

    I'll freely admit that I'm at somewhat of a disadvantage these days when trying to make sense of 'New Economy' stocks. However, this particular stock popped up on the 'radar' of one of my investor websites this week as a potential buy. From


    (snip)Big-time car companies like General Motors (NYSE:GM) and Tesla (NYSE:TSLA) continue to make strides in the electric car industry, and Ecotality—a maker of car-charging stations under the brand Blink—is poised to reap the benefits.

    While we usually don’t bother analyzing penny stocks like Ecotality’s due to their high volatility, the increased popularity of battery-powered cars, and in turn the stations used to recharge those batteries, is too booming a market to be ignored.(snip)

    (snip)"Tesla’s battery-powered Model S sedan recently won the prestigious “Motor Trend Car of the Year” award. Additionally, GM recently revealed its newest battery-powered car, the Chevrolet Spark, which will be priced under $25,000 thanks to green tax incentives. Honda (NYSE:HMC) , Ford (NYSE:F) and Toyota (NYSE:TM) all plan on coming out with new, electric cars as well, according to Marketwatch.

    So, yes, all of these new releases are definitely a catalyst for Ecotality’s stock both now and in the future."(snip)

    (snip)“The company saw its third-quarter sales rise 52% to $14.4 million as it works with the Department of Energy to deploy charging stations at Kohl’s, McDonald’s, and other parking spots around the country,” reported MarketWatch."(snip)





    I would also point out that Ecotality does not have a P/E ratio because it LOST 51 cents per share on rising sales volumes.

    Seriously, could somebody please explain to me how to analyze 'new economy' companies / stocks like this one ???

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    Default Re: Seekiing Opinions on a 'New Economy' Stock Investment

    Any new technology companies without proven steady income should be valued as an option with a 2-3 year expiry date. A probability graph or a monte-Carlo simulation would approximate the value, but always remember black-swan events(both positive and negative). This is the case for the past 50-60 years. Nothing new.

    Of course if you are writing for a blog that Melonie links to, then I have to assume that you are mostly clueless about how the world works, how the economy works or how to value assets.

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    Default Re: Seekiing Opinions on a 'New Economy' Stock Investment

    ^^^ I'm familiar with the Monte-Carlo simulation. However, my question related to analyzing the economic fundamentals in some rational way that could potentially explain the major uptick in this stock's share value since I first started this thread. Or am I being old fashioned to think that economic fundamentals matter anymore ?

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    Default Re: Seekiing Opinions on a 'New Economy' Stock Investment

    Quote Originally Posted by Melonie View Post
    ^^^ I'm familiar with the Monte-Carlo simulation. However, my question related to analyzing the economic fundamentals in some rational way that could potentially explain the major uptick in this stock's share value since I first started this thread. Or am I being old fashioned to think that economic fundamentals matter anymore ?
    Fundamentals Analysis (Nate Silver/ Warren buffett) absolutely matters. However ideology under the guise of fundamental analysis(Dick Morris/zero hedge) will destroy you.

    Remove biases, blinders, and ideology-driven-analysis, you'll be rewarded. Prepare for the new era of data-driven, fact based, and logic based world continuously destroying ideology.

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    Default Re: Seekiing Opinions on a 'New Economy' Stock Investment

    OK I'll bite ... but how about some specifics in regard to ECTY ???

    - business model ... they produce an 'accessory' for electric vehicles. 'Free Market' demand for electric vehicles is very low, thus 'free market' expected demand for ECTY's electric vehicle chargers is expected to be very low as well.

    - price / earnings ratio is negative ( i.e. the company hasn't turned a profit at any point in its history ) ... albeit loss levels declined in the last quarter

    - company's debt level is very high ... albeit that most of that debt carries a low gov't guaranteed interest rate

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    Default Re: Seekiing Opinions on a 'New Economy' Stock Investment

    in the way of an update ...

    Between the time that this thread was originally posted and last month, ECTY's stock price just about quadrupled. However, in the last month or so, ECTY's stock price has fallen off a cliff. Today the company filed for bankruptcy ... see . The reported catalyst was a massive drop-off in sales of the company's electric vehicle charging stations due to discontinuation of future purchases by the US DOE .

    (snip)""ECOtality was heavily involved in the federal government's EV Project," Electric Vehicle project, "sponsored by the Department of Energy. The goal of that program was to install charging stations and electric vehicle infrastructure throughout the United States. ... In the filing, ECOtality says the DOE stopped making payments to the company. It also claims that its charging stations are not making a profit." (snip)
    Last edited by Melonie; 09-17-2013 at 03:16 PM.

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