Tuesday, February 4, 2014

Active Power: This Struggling UPS And Infrastructure Solutions Provider Could Be Up For 60% Upside

Active Power (NASDAQ:ACPW) has failed to grow its core business but the business has taken a big step in the right direction for a full scale turnaround through a management overhaul. Its shares have been under pressure since 2012 but there are several catalysts at work that can push its shares higher. 

Active Power (ACPW) is a small-cap company that designs and develops backup power systems and provides continuous infrastructure solutions, through its uninterrupted power supply (UPS) and modular infrastructure solution (MIS) products, to data centers and other mission critical applications. The 21-year old company, which trades on the NASDAQ, is headquartered in Austin, Texas and serves the local, as well as British, German and Chinese markets. Last year, Active Power earned 40% of its revenues from international markets.

The company's top line growth significantly slowed down in 2012 and finally turned negative in 2013. Moreover, the management's confusion with its partner in China exacerbated the situation. As a result, the business's shares have dropped by 14% this year and are now trading just 0.93 times its trailing sales. The company has made some key changes and there are several catalysts at work that could translate into a significant upside for shareholders.

Products: UPS and MIS

Active Power introduced its patented flywheel-based UPS systems in 1999 and so far, by the end of September, it has sold more than 3,900 flywheels in UPS systems to customers located in 57 different countries around the world. The flywheel based UPS products, which are sold under the brand name CleanSource, provide higher power efficiencies, higher power densities, greater space savings and an environmental friendly energy storage solution as compared to other battery-based conventional UPS products manufactured by its competitors. These products come with load capabilities of up to ... read full article at Seeking Alpha