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Independent Investment Advice Since 1970

Zenn Motor Company (4ZNN)

It’s Zenn Motor Company (4ZNN). The name stands for Zero Emission No Noise, and if you’ve got your thinking cap on you’ve probably guessed that means it runs on batteries. Correct.

The company’s two-seat vehicles have a regulated top speed of 25 MPH and a range of 35 miles. Recharging is accomplished by plugging in to a normal 110 V outlet overnight. Suggested retail price runs from $12,500 to $14,995. And the current market is master planned/gated/retirement communities that welcome the low speeds, the quiet and the zero emissions. Could the market be much bigger than that someday?

Of course.

But this company is tiny! Second quarter revenues were $0.1 million, down from $0.7 million in the first quarter. The loss was six cents per share.

Analysts (well, there’s a least one) are projecting a profit of a penny per share for ZENN in 2008 and the stock is now in an uptrend…sort of. As I write, it’s corrected from a high of 5.4 in June to a low of 3 in August, and now it’s working its way back.

But—and this is important—ZENN is very thinly traded. Average daily trading volume is just 49,000 shares. The stock is traded on the Toronto Stock Exchange and on the pink sheets; simple signs that risk is very high.

If you’re interested, do some digging for yourself. I’m not recommending the stock and I won’t respond to any emails that ask about the company or the stock. It’s just too speculative for me.

But I write about it because, well, I like cars, and obviously there’s a market opportunity for non-polluting vehicles.

The trouble is, this is an extremely competitive industry and there’s no question that management at Zenn has far less experience than management at the big companies. But I’ll keep an eye on it from time to time as the months pass.

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