Sevcon ( Nasdaq - SEV ) -- Scaling Up

Sevcon (SEV $7.25) reported excellent on target Q2 (March) results.  Earnings improved 8% to $.14 a share.  Sales expanded 30% to $10.1 million.  The company is a leading provider of drive train controls for electric vehicles.  In the past Sevcon emphasized the off road market.  That segment was hit hard by the recession and remains far below historical levels.  The company has been picking up the slack with on road programs including scooters, bikes, and small city cars.  Those are niche markets as far as the automobile industry is concerned.  So the big drive train producers haven't participated in those markets in a meaningful way to date.  Sevcon is taking advantage of its opportunity to cultivate a number of relationships that could become substantial contributors over the coming decade.  It also recently formed a manufacturing relationship with outsource giant Flextronics to ensure it can meet higher levels of production if demand suddenly arises.  Sevcon is establishing an arsenal of engineering know how that promises to yield additional contracts in the future.  Profits are rising in the meantime as the off road business recovers and the new programs kick in.  The electric vehicle market holds ample potential even if it remains a niche business.  If new battery technologies are developed the industry could expand dramatically in the future, propelling Sevcon to substantially higher levels of business activity.

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