Battery Stocks UPG, CLTT and VNDB: Searching for Growth in a Tough Industry

Universal Power Group (AMEX: UPG), China Lithium Technologies (OTC: CLTT) and Vendum Batteries Inc. (OTC: VNDB) are three battery stocks in the somewhat beaten up battery industry (Earlier this week, I also wrote about Chinese battery stocks CBAK, HPJ and CSGH plus three clean tech battery stocks: ALTI, ABAT and HEV). And while Americans alone use as many as 5 billion batteries a year, battery stocks like UPG and CLTT (VNDB is a development stage battery stock) face intense competition as well as rising raw material costs. Nevertheless, its important to remember that an industry is made up of a diverse range of individual stocks like UPG, CLTT and VNDB. Hence, here is a closer look at all three to help you decide whether further due diligence is warranted:

• Universal Power Group (AMEX: UPG) is a supplier and distributor of batteries and related power accessories plus the company is a provider of third-party logistics and supply chain management services. For 1Q2011, Universal Power Group reported a 17% drop in net sales of $21.6 million verses $26.0 million for 1Q2010 and net income of $402,677 verses net income of $505,709 for the same period last year. However, Universal Power Group is in the process of diversifying its revenue stream. Specifically and in April, UPG acquired Progressive Technologies, Inc. (PTI), a North Carolina company involved in the design and the assembly of custom battery products for OEMs in the government, medical, military and technology markets. This will give UPG access to the fast growing medical and technology battery markets. Universal Power Group recently rose $0.19 (6.33%) to close at $3.19 and has a 52 week trading range of $1.96 to $4.99 a share.
• China Lithium Technologies (OTC: CLTT) is a Chinese designer, manufacturer and marketer of lithium-ion battery products for use in electric tools, electric bicycles, electric motorcycles and other types of electric vehicles and products. For fiscal 3Q2011, China Lithium Technologies reported that revenue increased 27.8% to $3.4 million but net profit fell from $404,683 for the same period last year to $170,194 for this year. However, CLTT’s CEO noted that the company is well positioned to benefit from current trends towards electric vehicles. China Lithium Technologies recently closed at $2.05 and has a 52 week trading range of $0.22 to $75 a share (and no, the 52 week trading range is not a misprint!).
• Vendum Batteries Inc. (OTC: VNDB) is a UK based company that is developing cellulose-based power sources for the aeronautical and automotive industries. Specifically, VNDB sells licenses to use its intellectual property in order to produce and develop paper battery and non-toxic battery technology. Vendum Batteries Inc. is one of those stocks that love to issue press releases which will have a tendency to cause its shares to momentarily rise. Of course there is nothing wrong with that and VNDB is developing important technology that would make batteries much safer to dispose of – if the company has enough capital to see its products into production. On the other hand and in its latest financial filings, VNDB noted that it has $21,000 in cash and cash equivalents on hand, zero revenues and an annual net loss of more than $635,000. Vendum Batteries Inc. recently closed at $0.10 and has a 52 week trading range of $0.02 to $0.34 a share.

The bottom line: Battery stocks VNDB, CLTT and UPG are somewhat of a mixed bag for investors and hence, long-term investors should do thorough due diligence on each one before making an investment.