Why Today's 10% Jump in Capstone Turbine Corporation Stock Signals Something Big

Yet another order sent the microturbine maker stock soaring, but this isn't just any order.

Jan 17, 2014 at 1:35PM

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: Capstone Turbine (NASDAQ:CPST) shares have gone bonkers, but for a reason. After rallying through the week, the shares surged nearly 10% in today's trade on yet another order announcement by the company.

So what: After bagging orders from the Marcellus and Utica Shale regions last week, it was the turn of Permian Basin this time. Capstone received orders for a total of 27 microturbines from oil and gas producers operating in the region. The deal is significant for several reasons.

One, multiple orders from same customers shows how Capstone's turbines are gaining popularity among the oil and gas companies in the U.S. Two, this order also marks Capstone's "first multiple megawatt project" to power electricity grid in the Permian Basin. Three, and most importantly, with the Permian being touted as America's next great shale play, Capstone may have just found a gold mine. For perspective, some analysts project crude production from the Permian to double by 2018. So you can imagine the kind of opportunity that Capstone is staring at.

Now what: It is undoubtedly a big order for Capstone Turbine. The company is rapidly gaining ground in the lucrative and high-potential oil and gas sector, as evidenced by the string of orders that it has received of late. And do you know which companies have already made it to Capstone's customer list? Chesapeake Energy, Chevron, Anadarko Petroleum, Hess, Linn Energy, and Marathon Oil are just to name a few.

In short, Capstone is taking the sector by storm with its small, but power-packed low-emission turbines. That partly explains why its revenue and gross margin expanded by double digits last year. Though Capstone is yet to turn in a profit, a swelling order book and surging top line should enable it to break even soon. Today's order should just give you another reason to keep this little stock on your radar.

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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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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