Thursday, September 28, 2006

Calls of Note Part 1

- Jefferies notes that at the Intel's Developers Forum, the company displayed a prototype 128 MB wafer based on Energy Conv. Devices' (NASDAQ:ENER) phase change memory that it intends to use as a flash memory replacement. Firm believes this is a significant development that is likely to drive ENER's share price higher.

This is the first confirmation from Intel that it was developing a product based on this technology. Importantly, Intel has staffed an entire "Phase Change Group" to develop this technology. And according to Intel at the forum, phase change memory is likely to be the memory technology of the future. Where Intel goes, others likely follow.

Firm notes they have not included any revenues or licensing fees from phase change memory until they get better visibility on the timing and scale of product rollout from Samsung, Intel and others. But the market for DRAM and Flash memory is expected to be close to $50 billion in 2008-2009. At a 1% licensing fee, this could amount to an incremental $2.50/share to earnings.

Jeffco is calling ENER shares inexpensive saying the co is is trading at a discount to the solar industry even though it has similar expected growth rates and the best balance sheet with $400M in cash. They reiterate Buy rating and $65 price target, which is about 90% upside from current levels.

Notablecalls: High five to Jeffco's Clean Energy team! I know some people from Jeffco are reading this blog, so do give my best regards to Bencik. ENER will surely see strong interest in the coming days. Note that the $65 price tgt does not include any contibution from INTC.

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