Water is the new oil — or at least that how investors feel about Ocean Power Technologies Inc (NASDAQ:OPTT) after it announced the commercial deployment of its PB3 PowerBuoy, which uses wave motion to generate power for marine applications.
OPTT stock popped 90% on intense volume (some 23 million shares exchanged hands vs. the average 722,000), and Ocean Power’s stock is now up 300%-plus for the year. CEO George Kirby had this to say:
“We are delighted to announce that we now have two PB3 PowerBuoys deployed off of the coast of New Jersey, with one of them being our anticipated commercial PB3 product offering. This deployment of our PB3 represents what we expect will be the final validations step prior to release of the product to our target customers and markets.”
Zoom out on OPTT stock’s performance since coming public and it’s still off a grueling 95%, including a 1-for-10 reverse split last year to get its share price out of the basement. This year’s gains, despite the ups and downs of the broader market, have been psychologically important for Ocean’s investors, who now have an active catalyst in the PB3 PowerBuoy.
Located 4 miles off the coast of New Jersey, the PB3 has been redesigned and fitted with high-capacity energy storage. Essentially, Ocean Power’s PB3 acts as an “Uninterruptible Power Supply,” using a scalable battery system to continuously provide power.
And at the beginning of June, entered a lease agreement with Mitsui Engineering and Shipbuilding, which would see MES deploy a PB3 PowerBuoy off Kozu Island in Japan.
Right now, according to Thomson Reuters, there are no analysts covering the stock … which can signal an undiscovered opportunity.
However, it could also point to a risky issue.
Investors clearly see potential here, given the massive buying spurts in OPTT. But the newest technology still is in its nascent stages, and has much to prove. Meanwhile, the company has been bleeding red ink for years, including a $13.11 per share loss in 2015.
For now, considering OPTT’s outlandish gains after years of turmoil, expect profit-taking to hit the stock sooner than later.
As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.