Knobias ClipReport (8-31-2007)

Submitted from Knobias ClipReport

While many feel that Hillary doesn’t have a chance to be the next president, the Democrats could still pull out the election especially considering the continued predicaments that Republicans have put themselves in with Larry Craig’s ordeal, the Gonzalez resignation, and David Vitter’s scandal.

The hits keep coming for the party which could undoubtedly cause the president’s party to see a change of hands. With the many initiatives that have recently been repealed by the Republican president and the scandals the party is currently facing, it could be time to revisit some of the sectors that saw increased action on the vetoed legislation. Stem cell stocks could easily become a hot sector again with a Democratic President as could alternate energy names. Even though solar has been very hot this past summer, the entire sector could see a huge increase in attention with a Democrat at the helm.

One name in particular is Akeena Solar, Inc. (AKNS). The Company is a designer, installer, marketer, and seller of solar power systems for residential and small commercial customers.

Solar energy systems are expensive, but generous incentives make them affordable. Fortunately, there are a wide range of federal, state and local programs that substantially offset these costs in the form of tax credits, rebates, grants, loans, leasing and direct equipment sales.

Business customers enjoy substantial benefits in return for their solar purchases. The combination of state solar energy tax credits, the Federal 10% investment tax credit, and accelerated five-year depreciation means that solar energy systems generate substantial positive cash flow, particularly in the first five years of operation.

The Company reported second quarter earnings in early August. Net sales for the second quarter of 2007 were $7.5 million, compared to $2.8 million of net sales in the second quarter of 2006. Gross profit for the second quarter 2007 was $1.8 million, or 24 percent of sales, compared to $715,000, or 25 percent of sales in the second quarter of 2006. Net loss for the second quarter of 2007 was $1.9 million or $0.10 per share, compared to net loss of $248,000 or $0.03 per share in the second quarter of 2006. For 2007 management reiterated its guidance for revenue growth of approximately 135 percent over 2006 revenue of $13.4 million.

With the addition of 2 new locations, the California footprint is building while the Company also has locations in New York, New Jersey, and also services Connecticut.

The California market has seen huge increases in the demand for the products which the Company has attempted to service with the added locations. The traction these new locations have gained could be evident with the Company’s third quarter earnings release which is expected to be reported in mid November.

In the meantime, the Company could see increased attention following their presentation at Kaufman Brothers Investor Conference on September 5th. With the Democrats eyeing the top seat in the government and their lean towards alternate energy prospects, the sector deserves increased attention with the republican scandals currently residing atop news headlines. With any type of increased subsidizing or footprint, the sector is one to follow. Investors would be wise to watch.


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