Intermagnetics General

Intermagnetics General (IMGC – NASDAQ) is a combination of a growing and profitable health care technology company and a development-stage energy technology company, both of which focus on superconducting materials. The health care business, which sells the components at the heart of magnetic resonance imaging (MRI) systems, funds the research and development of the energy division. The energy division is developing superconducting wire that can carry three to five times the load of conventional copper wire. The health care business is itself attractive, but the upside potential of the energy technology business offers the kicker on the stock.
The MRI market is a $3.0-3.4 billion market growing at a 9-10% rate. IMGC is one of the key players in the components piece of this market (magnet systems and radio frequency coils). The company is able to produce smaller, lighter magnets than competitors, allowing MRI machines to be located easily within hospitals.
IMGC is transferring its expertise in superconducting materials into the energy transmission and distribution market. It is developing superconducting wire, which increases the capacity, reliability and quality of electrical power transmission. It also has virtually zero loss of energy, whereas the conventional grid has an average loss of 7%. This is the biggest environmental benefit of the technology, and an important factor in making it cost effective. Upgrading to superconducting wires is the equivalent of massive energy savings, reducing the need for increased electric generating capacity. A secondary environmental benefit comes from the fact that superconducting wire uses environmentally benign liquid nitrogen as a coolant instead of dielectric oil, which is environmentally toxic and flammable.