Ready for a Hybrid?

Written By Jeff Siegel

Posted July 19, 2005

Dear Wealth Daily reader:

According to a new study on consumer interest in hybrid automobiles, it’s becoming clear that the industry is doing a stellar job of getting the word out.

The study, conducted by the Polk Center for Automotive Studies, found that 97% of those surveyed are familiar with the hybrid vehicle…78% would consider buying one…and nearly two-thirds felt that hybrid vehicles were not just a fad.

However, the study also found that 61% of those who have never owned a hybrid vehicle, indicated that the inflated cost (a premium ranging from $4,000 to $9,000 to its traditionally powered counterpart) could be a deterrent to them.

Perhaps the difference of price premiums between hybrid vehicles and a pound of ground beef is where LOHAS consumers draw the line when it comes to their "I don’t care" attitude of price premiums.

Of course, an argument like that could be irrelevant within a few years too – as advances in technology and consumer acceptance will inevitably level retail costs.

Hybrid technology companies and the U.S. government are already working feverishly to advance the technology as quickly as possible. And between decreased oil supplies and the potential profit from hybrid technology – there’s just too much at stake at this point.

In fact, last week the U.S. Department of Energy announced a $195 million joint investment initiative with the U.S. Council for Automotive Research (USCAR) to help develop advanced high-performance batteries for electric, hybrid electric and fuel cell vehicle applications.

U.S. Secretary of Energy, Samuel Bodman called the venture "the key to securing our nation’s energy future."

There’s no doubt that these kinds of joint ventures will only help support the burgeoning hybrid automobile market. And Daimler Chrysler Corp., Ford Motor Company and General Motors Corporation – all of which facilitate this cooperative research through USCAR, have more than 10 years and hundreds of millions of dollars invested already.

So you can be sure they’re expecting a real payoff for this investment.

But these automotive giants aren’t the only ones anticipating hefty yields here either.

There’s also a small group of LOHAS companies that have a lucrative interest in the success of this research as well. Companies that are already manufacturing, testing and advancing hybrid and fuel cell technology as you read this.

This will, without a doubt, be one of the fastest growing segments of the LOHAS market within the next 3 years.

In fact, some institutional investors are already digging their meat hooks into a few of these companies already.

One in particular is a Colorado-based hybrid developer, that less than a month ago saw 1.3 million shares of its common stock gobbled up by two mutual funds managed by an institutional investor.

But despite that kind of attention drawn to this small $3.30 stock, there are still a few hidden hybrid gems that’ll be riding the coattails of the major automobile manufacturers for the next few years – slowly building up their value as the race for hybrid technology and cost efficiency continues.

By the time hybrids become a normal fixture in the landscape of our cities and highways, these companies will have steadily grown to more than 3 times what they’re worth today.

Which is why it’s so important to know who the players are now.

And speaking of major LOHAS players, Whole Foods Markets (WFMI:Nasdaq) announced yesterday that it will be opening a new 55,000-square-foot store which will anchor the new Southgate Market mall, two blocks from a Target store in a Chicago community that’s undergoing tremendous new residential growth.

The five-level mall will house 15 retailers, including Office Depot, Linens ‘n Things and discount shoe retailer DSW.

Just another example of WMFI’s continuous growth that’s made it the 4th largest grocery store chain on the planet.

Of course, like I’ve said in the past, the real money has already been made here.

So why is that I keep talking about this natural food retailer?

Because it’s WMFI’s strategy that serves as one of many positive indicators for our next LOHAS play – that young Canadian company that’s been creating quite a buzz here at the Wealth Daily office over the last few weeks.

What some are considering to be the "Whole Foods of Canada," LOHAS insiders have already identified this company as a major competitor in both LOHAS and conventional markets in North America.

And since it hasn’t lost a dime in 4 years – it’s only a matter of time before the Wall Street dumpster divers start sweating it. Which is why I plan to give you the goods on this one in less than two weeks.

And join me next Wednesday when I’ll tell you more about the LOHAS hybrid and fuel cell segment, as well as another alternative energy resource that’s so efficient…not only can it provide enough electricity for a small town – but it actually helps the environment.

Until then,

Jeff Siegel
Editor, Green Chip Stocks

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