This column is for investors willing to take more risk and potentially receive more reward.  The stocks mentioned in this column are not recommended to buy or sell.  They're brought to your attention so you can investigate them further to determine if they fit your risk profile.  Most of the stocks will have less than $1 billion of market capitalization, have more volatility than other stocks, and oftentimes no earnings.  And some will have tremendous stories.

October 15, 2010 - Advanced Energy Holdings, Inc.(AEIS-NASDAQ) together with its subsidiaries, designs, manufactures, sells, and supports industrial power conversion products that transform power into various usable forms. Its products enable manufacturing processes that use thin-film deposition for various products, such as semiconductor devices, flat panel displays, solar panels, and architectural glass, as well as grid-tie power conversion in the solar market.

In addition, it sells thermal instrumentation products, which consist of thermal management and control solutions that are used in rapid thermal processing, chemical vapor deposition, and other semiconductor and solar applications requiring non-contact temperature measurement. Further, the company provides repair and maintenance services.

Advanced Energy Industries sells through direct sales force, sales representatives, and distributors in the United States, Europe, and Asia. The company was founded in 1981 and is headquartered in Fort Collins, Colorado.

Sales more than doubled in the second quarter compared to last year's second quarter ($100.1 million vs $35.6 millon). First quarter sales more than doubled last year's first quarter ($81.6 million compared to $32.6 million). The main reason: strong demand for semiconductor components, other nonsemiconductor, thin-film products and inverter business supplies.

Inverters convert direct current (DC) to alternating current (AC); the converted AC can be at any required voltage and frequency with the use of appropriate transformers, switching, and control circuits. The inverter business at Advanced Energy is one of its core strengths. In the second quarter, the company shipped $14 million worth of the equipment. New orders are pouring in from U.S. manufacturers, on top of the backlog already in place. Europe is beginning to show new strength as power grids are installed or updated. China is also in the mix with new manufacturing facilities being built to help AEIS take advantage of the renewable energy market that is growing across Asia.

The company also sees increased demand in China for other products: flat panel televisions, LED backlighting, and three-dimensional video products. All require thin-film applications. AEIS is putting more money into developing crystalline silicon and other thin-film applications to meet demand.

The balance sheet looks good. There's no debt. There's $129 million in cash or $2.98 a share with a Current ratio of 2.91.

More numbers: Revenues for the last 12 months were $296 million. Last year total sales were $186.4 million. This year, expect $465 million. Market Cap is $617.73 million. Trailing P/E for the last 12 months is 47 but Forward P/E is 8.28. Price to sales ratio is 2.07. Price to book is 1.97. Book value is $7.19. Return on equity for the last 12 months was 2.98% while Return on assets was 2.43%. The 52-week low was $10.72, the high $18.53. There are 43.25 million shares outstanding with a Float of 36.64 million. Insiders own 16.54% of the stock. Institutions have 87.50% of the Float. There is no dividend.

Keep in mind that the semiconductor business is very cyclical. Right now, it's on the upswing. Reports from Intel say that businesses are still buying technology products so expect sales to continue strong at AEIS in that division. Furthermore, the company recently bought PV Powered which will add meaningfully to sales and earnings over the next several years.

This stock's price chart looks like an architectural rendering of the latest in roller coasters. It's reflected in the Beta of 1.91. It moves almost twice as far, up or down, as the S&P 500 index. So if you have an interest in the stock, be sure to know that it comes with plenty of volatility.

- Company Web site: www.advanced-energy.com

- Ted Allrich