Acorn Energy Inc., through its subsidiaries, provides technology-driven solutions for energy infrastructure asset management worldwide. It offers sonar- and acoustic-related solutions for energy, defense and commercial markets. The company also develops and markets remote monitoring systems to electric utilities and industrial facilities, which are used in a range of utility applications. In addition, it develops and produces fiber-optic sensing systems for the energy, commercial security and defense markets. Acorn's patented ultra-high sensitivity fiber-optic sensors are designed to replace electronic sensors.
The information provided below is from analysts, newsletters and other contributors. Please contact the company and visit its website before making an investment decision.
James McIlree, Dominick & Dominick LLC
"The long-term bullish story on Acorn Energy Inc. is unchanged: The company has positioned itself to benefit from and drive the longer-term changes in the energy and power markets. . .we still think US Seismic is the key to Acorn getting a big valuation because of its role in driving natural gas and oil production via hydraulic fracturing. The company's fiber-optic geophone offers performance and cost advantages over existing technology and its adoption will improve reservoir economics and be a key factor in alleviating overblown, in our view, public concerns regarding the safety of hydraulic fracturing."
Rudolf Hokanson, Barrington Research
"We continue to recommend Acorn Energy Inc. with an OUTPERFORM investment rating. . .the company is on the Barrington Research Best Ideas List for 2013. . .each business holds promise in their markets. Margin expansion could be impressive with just a few meaningful contract wins in 2013—the likelihood of which is favorable but not assured, in our opinion."
The Energy Report Interview with James McIlree
James McIlree: Acorn Energy Inc. is the majority owner of US Seismic Systems Inc. It manufactures a device called a fiber optic geophone, which maps geological formations using seismic waves. US Seismic's new geophone delivers a much greater sensitivity for detecting seismic activity, and at a much lower price than the existing technology. For this reason, this new product is expected to replace the geophone products oil and gas companies currently use. The product is still in the development stage, but assuming that it gets successful results from a series of upcoming tests, the company will increase its revenue via the successful launching of a new product cycle. . .Acorn delivered its new geophone to an unnamed supermajor for testing. This is a global oil and gas company with assets in exploration, production, refining, marketing and chemicals. The supermajor will be testing the geophone side by side with other products. That test should begin in May. At that point, there are several future paths for the company. The most bullish path is that the supermajor says, 'We love this geophone, and we are going to buy a whole bunch of them!' And then US Seismic obtains significant revenues in H2/13.
TER: What about Acorn's other properties, GridSense Inc. and OMNIMETRIX LLC?
JM: GridSense makes a device that monitors the performance of the electrical transformers that are ubiquitous throughout the electric utility network. It can predict breakdowns. That allows a utility to do preventative maintenance, rather than waiting for an outage and deploying a truck to fix a broken part of the grid. . .the product is very relevant, but its sale cycle is quite long. I am very optimistic about the prospects for OMNIMETRIX. It produces a monitoring service for backup power. It has just transitioned to a new business model, and did about $1M in revenues in 2012. It can do $2M this year, and maybe $7M in 2014. The nice part about this business is that most of its infrastructure has been built, so the extra dollar of sales has a high incremental margin attached to it. OMNIMETRIX should see subscribers, revenue and cash flow all grow rapidly over the next few years. It's in a hot space called M2M, or machine-to-machine communications. . .OMNIMETRIX is poised to create a lot of value. . .we expect Acorn to grow its subsidiaries and sell one or two of them at valuations around $75–100M.
"ValuEngine has issued a Buy recommendation for Acorn Energy Inc. on Apr. 23, 2013; based on the information we have gathered and our resulting research, we feel that Acorn has the probability to outperform average market performance for the next year. The company exhibits attractive five-year annualized return, expected EPS growth and risk."
Ross Silver, Vista Partners
"Acorn Energy Inc. has an experienced management team with proven ability to monetize subsidiaries at significant multiples to cash invested. . . all four portfolio companies are expected to grow revenues and back log considerably in 2013, all in large addressable markets."
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