Friday, October 19, 2007
United Technologies (UTX) - UTC Power
Profile: United Technologies (UTX) - NYSE (New York)
P: 76.00 USD (Oct 19) ; 52 Wk Range (61.8 - 82.5); P/E: 18.72; Year Div: 1.28 (1.68 %)
United Technologies Corporation is based in Hartford, Connecticut, U.S.A. and has the following major businesses as part of the Corporation: Carrier Heating and Air Conditioning Systems, Hamilton Sundstrand Aerospace and Industrial Systems, Otis Elevators and Escalators, Pratt and Whitney Aircraft Engines, Sikorsky Helicopters, UTC Fire and Security Protection Services, UTC Power and United Technologies Research Center. For 9 months ending September 30, 2007, United Technologies revenues increased by 14% to $40.05B. Net income for the same period increased 10% to $3.16B.
What makes United Technologies an interesting company to watch is how well they capitalise on the UTC Power business (South Windsor, Connecticut). At this moment, investing in the stock for the UTC Power business itself is a wait and see investment opportunity. For European, Middle East and Asian investors, judging the moment to enter into the stock is dependent upon the U.S. Dollar starting a trend upwards, and the overall U.S. and Global general stock market conditions. At some point in time, market and currency volatility will stabilise, and United Technologies looks very attractive as a long position hold thereafter. For U.S. investors it is a recommended stock if the overall global stock market volatility stabilises over at least a future three month consecutive period, which should probably coincide with a general upward trend in U.S. 'blue chip' stock prices.
UTC Power has provided the hydrogen fuel cells to every manned U.S. space mission since the Apollo's. They are also technology leaders in new applications of wind power for high rise buildings, and are involved in new automobile development applications using fuel cells. UTC is a multinational corporation and the other business divisions are successful and able to absorb US dollar weakness as they have European, Middle East and Asian markets to sell to as well. Hydrogen Fuel Cells are a significant growth market for UTC Power.
What will make the UTC Power business a huge growth area for United Technologies, will be how well they can organise this business unit to develop marketing channels for the new renewable energy products. If they reward, inspire, and grow their R&D talent, protect their technology, develop mass production efficiency and quality, then it could allow them to secure a huge new market in new energy products. UTC Power will need to grow a strong united management team with focused goal setting that efficiently integrates R&D, Sales and Operations together. This is not to say they don't have some of this in place, but to become a very significant growth stock in renewable energy, they will need to make the most of their fuel cell knowledge and transfer this to automotive, railway, commercial buildings and even aviation on board power applications. In the area of commercial wind power, geothermal and solar power for commercial and residential applications they have the technical ability to bring this to market as well. Profit will be based upon technology excellence, manufacturing efficiency and quality.
The global renewable energy market (solar, wind, geothermal) and hydrogen energy power (fuel cell) will grow significantly in the next ten years as the manufacturing costs go down and the technology capability increases. The world is looking for zero emissions energy products.