Carrying a heavy short interest of nearly 20% and the move towards profitability still a little bit of ways away, shares of Capstone Turbine (CPST) have been beaten back to the dollar level, a place where recent history has proven to be a decent buy-in level. At times shares have briefly dipped below the dollar mark, but rebounded in fairly quick fashion. Last year, in fact, shares even breached the two dollar level after a mention by US President Barak Obama during an energy speech in Brazil.
Still, as the world turns towards greener energy alternatives, Capstone is positioned to take advantage of that trend.
Orders for Capstone's low-emission microturbine units have continued to roll in, both domestically and internationally, and on Wednesday morning the company provided information of another international order, this one from Singapore for one of the company' C1000 units.
According to the company's press release on Wednesday, "N&N Agriculture Pte Ltd, one of Asia's advanced, high-tech egg farms, purchased the C1000. The power package, which is fueled by biogas generated from animal waste in an anaerobic digester, will generate reliable, low-emission electricity and thermal power."
The unit will power the farm's six large climate controlled layer houses and two grower houses.
In being used to power a farm in Singapore, the versatility of Capstone's products are further emphasized. The units have been used in hospitals, shopping malls, oil and gas sites, railway stations and the technology has even been downsized to power some commercial vehicles.
Confidence in the growing applications has been reinforced by a deal with General Electric (GE) that, when discussed, could spark some speculative buyout talk.
Concerns over ever reaching the point of profitability continue to fuel the high short interest, and an order for one C1000 on Wednesday will not compel the shorts to cover in a flurry, but the company's recent ability to work through backlog, increase margins and bank new orders have all been encouraging signs to move forward with.
It looks again like CPST could be a decent buy while trending towards the lower end of its trading range.
Keep an eye on it.
Disclosure: Long CPST.
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