One of the biggest scientific discoveries since electricity is here. It is a subject covered by thousands of academic and scientific journals every year. This discovery is called carbon nanotubes (CNTs). You might have heard about it. These CNTs were actually discovered years ago, but have been virtually impossible to study and manipulate until recently.

CNTs are exactly what they sound like, tubes of graphitic carbon molecules with a diameter of 1-2 nanometers. But for as small these things are, the have some absolutely mind-blowing properties…

CNTs have 50 times the strength of steel and are lighter than aluminum. They have among the highest thermal conductivity of any known material and can transmit twice as much heat as pure diamond. They also are able to conduct 1,000 times more current than copper, which is the leading material in electricity conducting. They are also better semiconductors with electron mobility 70 times larger than silicon.

The applications for these characteristics are infinite. This technology can be used in touch screens, such as Nintendo’s handheld system; Liquid Crystal Display screens, which is a $1 billion-plus market itself; thin-film transistors, which are used in flexible electronics technology; solar panels because of the semiconductivity of these CNTs; and even fuel cells, solving the current problems with kinetic, resistive and mass-transfer losses in today’s fuel cells. Carbon nanotubes have even been studied as a possible material for a “space elevator.”

This is just the start. Think about this: These CNTs have 50 times the strength of steel and are lighter than aluminum, even when they are diluted with water and sprayed on various things. The result of covering things with this solution is like clear coating whatever you want with basically clear steel at a thickness of one nanometer. The possibilities of this are unlimited.

As you can imagine, there are many companies looking into exploiting this technology, but only one with the intellectual properties and resources to get it off the ground. This company just signed a licensing agreement that will get these CNTs out of the lab and into everyday life.

What make this company an interesting play are the recent mergers and partnerships. They signed an agreement in April of this year to start perfecting this technology for use on Nintendo products. The company also recently merged with another carbon nanotube industry leader. The merger combines hundreds of nanotube patents, which sets the new company apart from all of the competition. Finally, about a month and a half ago, the company signed a strategic alliance with the biggest R&D firm in the world, which has a budget of $3.8 billion.

In times of erratic markets, ideas like this one are going to save the smart investor. Many people are afraid of tech companies when other stocks are volatile, but smart investors know that surrounding circumstances don’t have an impact on innovations like this. In fact, some of the best investments are made when the market is unstable. And that’s exactly what we are looking to find here at Penny Sleuth. Until next time…

Sincerely,
Jim Nelson
August 22, 2007

P.S.: The carbon-nanotube company mentioned above is covered more extensively in the September issue of Greg Guenthner’s Penny Stock Fortunes, which will be in the mail next week.

Jim Nelson

Jim Nelson began his investing career during the tech boom at age 14 – with purchases of Starbucks and AOL. Early inspiration came from an old Tweedy Brown whitepaper: “What Works in the Market.” He graduated with a degree in Political Science from Pittsburgh University, Nelson focuses on income investing, including dividends, covered calls, and fixed-income. Additionally, he covers MLPs, ADRs, utilities, consumer staples and tobacco. Nelson is the managing editor of Lifetime Income Report.

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