Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What happens when a tiny company wins three back-to-back orders? The stock goes into a tizzy, and surges 17% in just five trading days. That's what happened to Capstone Turbine (NASDAQ:CPST) last week. The shares leapt and jumped every time the microturbine maker announced a fresh order, and are hovering near their two-year high right now. But does the rally make sense for investors to stay put, or has Capstone just become a trader's game?

Were those orders meaningful?
The first order for the year that Capstone announced last Monday was not only the biggest among all the orders that it has received so far this year, but also holds great potential. Capstone will install microturbines totaling 24 megawatts in size at modular power stations in Russia. Since some of those turbines will run on natural gas that otherwise would go waste, Capstone's turbines could be one of the solutions, even if small, to Russia's huge flare-gas emissions issue. That could turn into a massive opportunity for the company.

Investors also got a hint about how Capstone's turbines are increasingly gaining popularity in the lucrative oil and gas sector in the U.S. when two new customers, aside from a couple of existing customers, operating in the Marcellus and Utica Shale regions placed orders worth 6.4 MW last week. Not many know that most of the leading North American pipeline and midstream, and natural gas companies, already count among Capstone's customers, and that the oil and gas sector account for more than half of Capstone's shipments currently. Any addition, of course, will further strengthen Capstone's foothold in the market.

A one-megawatt order from a resort in Hawaii was the smallest that Capstone received last week, but it shows how the company is spreading its presence into every possible nook and cranny across the U.S. Since electricity is quite expensive in Hawaii because the state relies on imported oil to power its utility grids, Capstone believes that its energy-efficient and low-cost microturbines are a good fit. Nevertheless, with solar power taking Hawaii by storm, Capstone's success in the state may be limited.

What's next?
Overall, last week's order mix was undoubtedly a good one, and investors can expect a lot more to come. With the need to reduce emissions ever increasing, Capstone's multi-fuel microturbines should find more takers in the near future. An expanding order book should also enable the company to turn around quickly, especially since management is doing a good job at controlling costs. I won't be surprised if Capstone Turbine shares continue to propel higher on more orders.

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Fool contributor Neha Chamaria has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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