Why Shares of Capstone Turbine Corporation Jumped Today

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: Shares of Capstone Turbine  (NASDAQ: CPST  ) jumped as much as 14% in early trading today after the microturbine maker announced a new order.

So what: Fifty Capstone C65 microturbines have been ordered for oil and gas shale plays around the country. Capstone distributor Horizon Power Systems secured the orders that will bring its fleet up to 550 units used to support various oil and gas production operations.  

Now what: This is an incremental positive for Capstone, but it doesn't make the company profitable. Despite growth in the last couple of years, Capstone continues to report losses, and that's not good for a company trading at five times sales. At that price, the company needs to grow for years to come, and to improve margins dramatically, something I'm not willing to bet on even with this order.

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Read/Post Comments (6) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 12, 2014, at 4:20 PM, justasclueless wrote:

    Curious that Fool articles continue to just bash Capstone stock almost every day. One has to wonder whether there is an agenda at work here.

  • Report this Comment On March 12, 2014, at 4:37 PM, Rubicon wrote:

    Every time something good happens with Capstone, there's the Motley Fool trying to poison everybody's optimism. Why don't you charlatans just give it a rest? Not only are your predictions vastly more wrong than they're right, you clearly have an agenda which appears to be a desire to profit from shorting the stock. You have zero objectivity, therefore, zero credibility. I hope Capstone burned you badly in the past, and I hope they do it again.

  • Report this Comment On March 12, 2014, at 6:07 PM, delmar wrote:

    OH OH, here Travis is again bashing Capstone. Sooner later he will be right. But what then when CPST does become profitable, say by 1 or 2 cents. Now what? Would he say that profit is too small. Shish, with some, u just can't win.

    But - speaking of winning, I have very nearly doubled my investment return with CPST! In less than 1 year, too!

    I see in my crystal ball that in the future, CPST will be a buy-out candidate worth $15 - 25 dollars per share. Its technology is simply just too good to ignore.

  • Report this Comment On March 12, 2014, at 6:56 PM, FastMike wrote:

    Well, at least the article didn't mention the mere incremental increase in volume traded over the past several sessions.

  • Report this Comment On March 12, 2014, at 11:27 PM, vallorie5679 wrote:

    It is an advancement in technology that is extremely efficient and effective. Its is a no brainer as far as the product goes. As for the people handling the money, that is another story. Once company heads open their minds, accept change, and move with the times, this technology should catch fire. Once people know about it, it will sell itself. Sometimes you have to take a loss to be able to move forward. Its like boxing you cant give a hit unless you take a hit. If the product is in demand, its only a matter of time before there is progress. Patience young grasshopper.

  • Report this Comment On March 13, 2014, at 11:30 AM, tonyaa wrote:

    why don't u do your DD before u open your fat mouth. Have u listened to the last CC or taken the time to compare financials from last yr to this year?

    have u contacted the company and asked questions about what was said at the last CC ?

    most likely not

    your journalism is the worse kind,Prejudicial and vindictive

    give it a break

    it sounds like u lost a couple of bucks on a cpst trade and now u want retribution

    so sad

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