Capstone Turbine (CPST) investors were caught on the wrong foot as March drew to a close. There was no negative news from the company or the industry, but the stock tumbled 13% in just the last week of the month. And the stock hasn't quite recovered since.

A scathing article over at SeekingAlpha was largely to blame for the drop in Capstone shares. Contributor Adam Gefvert highlighted several yellow flags about the company and considered the stock hugely overvalued, sending investors for cover.

While I found the author's analysis lopsided in several ways, I'm going to pick on one point he mentioned that didn't seem to make much sense.

Comparison gone wrong?
While trying to draw a parallel between the recent run-up in prices of Capstone and fuel-cell stocks, Gefvert contended, among other points, that while newer markets are emerging for fuel cells, microturbines have applications in limited markets.

I beg to differ. Capstone already serves several market verticals, and the potential for newer opportunities within each is immense. See for yourself.

Oil and gas
The oil, gas, and natural resources sector ranks as Capstone's most important market right now, accounting for nearly 60% of its total shipments.

Some of the market segments to which Capstone caters. Source: Capstone Turbine

Here are some interesting facts that every Capstone investor should know:

  • Capstone turbines have already made inroads into the major U.S. shale regions, including the Eagle Ford, Marcellus, Utica, and the Permian Basin.
  • Capstone's customers include numerous major oil and gas customers, and it's already received several repeat orders from them over past few months, indicating the growing acceptance and popularity of its turbines.
  • Capstone microturbines can even run on flare (wasted) gas -- an advantage that helped the company bag a substantially big 24-megawatt order from Russia earlier this year. Did you know that Russia is the world's largest emitter of flare gas? 

In February, Capstone expanded its portfolio to the coal bed methane market by installing the first-ever methane-fueled microturbine in the U.S. at an energy plant belonging to CONSOL Energy (CNX 1.27%). CONSOL expects the low-emission microturbine to eliminate 6,486 tons of carbon dioxide annually, resulting in energy cost savings worth $80,000 annually. That should also answer, in part at least, Gefvert's doubts about how green Capstone microturbines really are.

Hybrid electric vehicles
Capstone microturbines can work well as "onboard battery chargers" in hybrid electric vehicles. Last year, Capstone received an order for 34 C30 turbines for use in DesignLine electric buses in Denver, and topped it off with a new five-year agreement with the bus maker.

The hybrid electric vehicle market is still in a nascent stage, but Capstone is attracting serious attention. Truck maker PACCAR is developing heavy-duty (Class 7 and 8) hybrid trucks fitted with a Capstone microturbine.

Wal-Mart WAVE Concept Truck. Source: Wal-Mart

The latest, and perhaps the most intriguing, example is that of the WAVE concept truck that Wal-Mart showcased at the Mid-America Trucking Show in Louisville last month. Capstone engineered the hybrid powertrain system for the truck.

These trucks may be futuristic concepts, but they also reflect how far microturbines can go.

Real estate
I'll just give a few order examples here:

  • Capstone received orders for several C65 and C200 turbines from New York City-based privately held real estate firm, Related Companies, in May last year. Here's a tidbit: The turbines will be installed at various new projects, including commercial towers at Hudson Yards.
  • Last month, two Southern California-based hospitals ordered microturbines from Capstone. Consider that California is known worldwide for its stringent emission standards.
  • A resort in Hawaii ordered a C1000 earlier this year.

Simply put, Capstone microturbines can be used as a source of power at most kinds of establishments, which could open up doors to more markets in the future.

Marine
Capstone microturbines are already used by European-based Deen Shipping on its vessels. Last year, Capstone added six distributors to expand its marine portfolio in the U.S., targeting players along the Eastern U.S. seaboard, Gulf Coast, and the West Coast.

Given that more than 2.5 billion tons of freight is handled in U.S. ports every year, the marine industry could hold great potential for Capstone.

Landfill
Microturbines are a good fit at landfill sites because of their ability to convert waste gas into on-site electricity. Capstone turbines have been in use at the Sauk County Landfill in Wisconsin for several years now.

With the largest British landfill operator, FCC Environment, opting for a microturbine (built by Turbec) earlier this year, Capstone might also look forward to more orders in this market. Microturbines can also be used in wastewater treatment plants, as highlighted in a fact sheet released (link opens a PDF) by the U.S. Environmental Protection Agency last year.

Food industry
In mid-January, Capstone received orders from a couple Italian food manufacturing companies that found the low-maintenance microturbines' dual capacity to produce electricity as well as steam promising. Capstone had earlier sold several products to a Mexico-based food manufacturer.

Foolish takeaway
Remember, the above list isn't exhaustive, and Capstone Turbine's microturbines could find their way into more industries as global emission regulations tighten. Gefvert perhaps didn't do his homework well, but you certainly should when it's your hard-earned money that's at stake.