Hoku Scientific leads the pack
The isle company's first-half earnings showed a 312.6 percent gain
STORY SUMMARY »
Hoku Scientific Inc., whose entry into the polysilicon business turned around the company's fortunes, saw its stock soar a staggering 313 percent in the first half of the year to easily post the best performance among the state's 11 most-actively traded companies.
Kapolei-based Hoku, which reports its fiscal 2008 first-quarter earnings Tuesday, soared from $2.61 to $10.77 in the first six months to finish up 312.6 percent.
Hoku has remade itself into a diversified alternative energy company with its decision to begin producing polysilicon, which is used to make solar modules, as well as its entry into solar module installation.
Hoku began six years ago as a developer of fuel-cell technology, a business which it is now de-emphasizing.
The next best performer among local stocks trading over $1 was turned in by Alexander & Baldwin Inc., which rose 19.8 percent to $53.11.
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Would you believe 313 percent?
Hoku Scientific Inc., described by one analyst as "The Little Engine That Could," saw its stock rocket to that astronomical gain in the first half of the year as investors bullish over the company's burgeoning polysilicon business pushed the stock to near-record highs.
The six-year-old company, whose stock has since exceeded its June 30 price, was one of only four local stocks to reach midyear with a gain out of the state's top 11 most-actively traded companies.
Hoku, which reports its fiscal 2008 first-quarter earnings Tuesday, soared from $2.61 to $10.77 in the first six months to finish up 312.6 percent.
Hoku officials declined to comment on the company's stock price movement, but a local stock expert, Chief Executive Richard Dole of Dole Capital LLC, attributed some of the heavy trading to day traders.
"It sounds like day trading," Dole said. "Hoku has about 16 million shares and there have been 12 million shares trading in a day (in some cases)," he said. "There's been almost a total turnover of their shares."
Still, Dole said, one has to give Hoku its due.
"Hoku outperformed everybody," he said. "No one has done as well as that. It's obviously a mixed bag among local stocks, but Hoku has taken off like a rocket. I'm not sure who's buying it."
Kapolei-based Hoku has remade itself into a diversified alternative energy company with its entry into polysilicon, the material used to make solar panels, as well as its entry into solar module installation.
It began six years ago as a developer of fuel-cell technology, a business which it is now de-emphasizing.
"We believe that fuel cells are a viable technology; however, we do not see significant revenue in the foreseeable future," Hoku Chief Financial Officer Darryl Nakamoto said. "We will continue to protect our intellectual property but have scaled back our investments for this business. We will not commit significant resources into our fuel-cell division until we have clarity on our future revenue opportunities."
Clearly, Hoku's immediate future is in polysilicon. The $260 million-plus plant that Hoku is building in Pocatello, Idaho, is expected to bring in up to $1.2 billion in revenue over 10 years from contracts it has signed with Solar-Fabrik AG of Germany, China-based Suntech Power Holdings Co. Ltd. and Japan-based Sanyo Electric Co. Ltd.
"We are excited about our prospects," Nakamoto said.
He also said the company's solar module installation business in Hawaii will complement its polysilicon operation.
"The tax credits that the federal government and state of Hawaii are providing make solar installations extremely attractive to the commercial and residential markets," Nakamoto said.
Of the local stocks that trade for more than $1, Alexander & Baldwin Inc. also was a big winner in the first half of the year as it rose 19.8 percent to $53.11, just pennies below a then-record high. A&B has been benefiting from subsidiary Matson Navigation Co.'s new ocean-shipping service to China.
Maui Land & Pineapple Co., which announced in April it was ceasing its canned pineapple operations to focus on fresh fruit, gained 8.3 percent to $33.92.
Mera Pharmaceuticals Inc., which has been trading under a penny, rose 90 percent to $.0095.
An inverted yield curve, which squeezes profit margins, hurt the local banks during the first half of the year. Bank of Hawaii Corp. fell 4.3 percent to $51.64, Central Pacific Financial Corp. dropped 14.8 percent to $33.01 and Hawaiian Electric Industries Inc., which owns American Savings Bank, declined 12.7 percent to $23.69. An inverted yield curve occurs when short-term interest rates are higher than long-term interest rates.
HEI also was plagued by operation and maintenance expenses by its utility, which supplies power to 95 percent of the state's population.
Barnwell Industries Inc., which operates oil and natural gas operations in Canada and holds real estate on the Big Island, fell 13.2 percent to $20.80.
ML Macadamia Orchards LP, which in May signed asn agreement to acquire Mac Farms of Hawaii LLC for $12 million in cash and stock, declined 16.6 percent to $5.12.
Nutritional supplement supplier Cyanotech Corp., which has been late in its financial filings due to an internal inventory accounting probe, lost 20.2 percent to $1.50.
Hawaiian Holdings Inc., parent of Hawaiian Airlines and the best-performing stock in 2006 with a 22.8 percent gain, fell 26.1 percent to $3.62 as it continued be hurt by an interisland airfare war and increased competition on its mainland routes.
Wednesday, July 25, 2007
» Hoku Scientific's stock gained 312.6 percent in the first half of 2007. A headline on Page C3 Saturday erroneously said the company's first-quarter earnings increased by that amount.