Green Energy Stocks: Capstone Turbine (CPST)
Capstone Turbine (CPST) has had a rocky 25-year history, including almost 14 as a public company.
The California firm, which makes microturbine engines used to remotely convert waste heat into energy, went public June 29, 2000, to big fanfare. Capstone came public at $16 per share, raising $130 million for the company, and CPST stock closed its first day of trading at $47.98. It then reached a high of almost $95 by the end of summer.
And then the bottom fell out, as Capstone’s price sank below $1 in a little more than 24 months.
CPST stock is definitely not for widows and orphans.
However, recent events suggest this long suffering company could be ready to actually make money.
Capstone’s revenue in 1999 was $6.7 million with an operating loss of $5.8 million. Its fiscal 2013 revenue was $128 million (19 times more) and its operating loss in 2013 was $22 million (less than four times more). It all sounds awful until you consider that until 2012, CPST didn’t generate a gross profit. In February, Capstone generated a Q3 gross margin of 20%, 6 percentage points higher than a year earlier, barely missing breakeven for the quarter. That’s good news for CPST stock.
The beauty of Capstone’s microturbines is not only do they allow gas producers to convert their flare gas into energy, but they also can help keep plants operating when power cuts occur. This video shows how a Colombian producer of palm oil has reduced the number of annual power cuts from 32 to zero thanks to its C65 Capstone microturbine. The cost savings, not to mention productivity gains, are tremendous. The benefit to customers is obvious.
The game-changer for CPST stock is providing those machines at a profit. That should come in 2014.