Editor's note: The previous version of this article erroneously gave a P/E ratio for Nanophase despite the company's unprofitability. The article has been revised and updated. We regret the error.
Since it debuted in 1997 as the first publicly traded nanotechnology company, Nanophase's
For some time now investors have been willing to value Nanophase at a premium (in terms of price-to-sales ratio) to other, larger chemical manufacturers such as BASF
This long-standing faith in the company's prospects might finally be justified. For one thing, Nanophase has had a long-standing agreement with BASF to supply nanoparticles to a number of its sunscreens, including its latest brand, Z-Cote Max, which is now being distributed globally. Nanophase also supplies nanoparticles to a division of Rohm & Haas
More importantly, Nanophase's nanomaterials have a growing range of potential applications in other products. For instance, nanoparticles can increase the abrasion and scratch-resistance of coatings (a $60 billion worldwide market), and they also have a number of uses as environmental catalysts in products such as fuel cells.
I don't know of any companies currently using Nanophase's nanoparticles for these latter applications, but I would encourage investors to keep their eyes open to such possibilities. The commercial marketplace is slowly awaking to the ways in which nanoparticles and nanomaterials can improve even the most mundane products.
Investors interested in nanotechnology, but who are willing to accept a little more risk in return for a greater rate of growth, might consider venture capital firm Harris & Harris
Interested in other nanotech foolishness? Check out these articles:
- Nanotech Is a Girl's Best Friend
- Nucryst Still Licking its Wounds
- TINY Investment Inches Closer to Payoff
- Nanotech and the War on Cancer
Fool contributor Jack Uldrich is the author of two books on nanotechnology, including Investing in Nanotechnology: Think Small, Win Big. He owns stock in Harris & Harris. The Fool has a strict disclosure policy.