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ThinkEquity Rates IMPCO Technologies Strong Buy
(3/28/2002)March 28, 2002–-ThinkEquity Partners has initiated coverage of IMPCO Technologies with a Strong Buy recommendation. The Research Note issued today by Lisa Callahan Novaczyk, Senior Analyst covering energy technology, gives IMPCO a $27 price target.
In giving the stock a Strong Buy recommendation Novaczyk said, ``Quantum is one of several companies involved in GM's global fuel cell alliance, focused on building a ''de facto`` vertically integrated fuel cell partnership. Valuing both IMPCO (core business) and Quantum using separate discounted cash flow and discounted P/E sensitivity analysis plus crosschecking Quantum against its comparables, we believe that each part is worth approximately $13 - $14, to arrive at a $27 price target.
In the research note Novaczyk said, ``Today, investors interested in IMPCO shares are essentially buying two separate companies. On one side, an established, growing, and profitable company focused on the alternative fuels industry. On the other side, an aggressive emerging business focused on the fuel cell market.
``IMPCO plans to spin-off Quantum as a tax-free distribution to shareholders of IMPCO Technologies during the second quarter of calendar 2002. In June 2001, Quantum formed a strategic alliance with General Motors (GM) in which GM, at the time of the spin-off, will receive a 20% equity stake in Quantum. We believe the value of each company separately could be worth at least the market capitalization of the entire company today.
This potential will be recognized through a spin-off, which will show how IMPCO's core alternative fuel products business is profitable and a strong cash flow generator. Additionally, this will allow investors see to Quantum as an enormous opportunity rather than a cash drain.
