Capstone Order Receipt Propels Interest (CPST)

Capstone Turbine Corp. (NASDAQ:CPST) is continuing its progress in moving more and more operational in a "greening" business climate.  Capstone announced that it has received the first order for its new C65 liquid fueled microturbine from DoCoMo Engineering (part of NTT DoCoMo) in Japan.

It isn’t a huge order and financial terms were not disclosed but it is further progress into more order generation.  The order is for two microturbines for system integration, scheduled to ship early next spring.  As NTT serves 52 million subscribers, the bulls tomorrow will probably be calling for more tomorrow (see quote below).

• Just a few weeks ago 24/7 Wall St. listed this in its "10 STOCKS UNDER $10" weekly newsletter (currently eligible for holiday discount) back when this stock was at $1.25 per share.  We noted the stock had been called a potential double by one of our favorite alternative energy analysts (Sanjay Shrestha at Lazard Capital Markets), but we noted how after we had dug around that this could be much more than a double if it delivers.  In fact, we stated, "…this one could have exponential growth potential that could make $2.50 go from less than a Big Mac all the way up to a full Happy Meal."  This one is still on target and at $1.61 in after-hours trading is up significantly from that $1.25 level we keyed in on.  Back in the bubble days, this had a $90+ stock price briefly.

In August, Capstone announced that it had begun development of the liquid fueled C65 microturbine and expected to begin taking orders. The C65 liquid fueled product has a net power output of 65 kilowatts and will provide the same technology advantages as previous microturbines.  The C65 liquid fueled microturbine is being developed for diesel fuel, but also to operate on biodiesel and ethanol.

NTT’s President Mr. Shingo Kita said, “We have been interested in Capstone Turbine’s environmentally friendly microturbine technology for some time now… NTT DoCoMo Group has always been an early adopter of new technology and today has over 1,000 remote cell sites using back-up generation technology….. we believe that there will be additional opportunities to apply this new technology within our remote cell sites.”

As this is expected to have a mere $43-ish million in revenues in all of 2008 and under $10 million per quarter currently, you can probably guess what the small cap alternative energy traders are going to be saying in chat rooms Thursday.

Jon C. Ogg
December 19, 2007

Jon Ogg can be reached at [email protected]; he produces the SPECIAL SITUATION INVESTING NEWSLETTER and he does not own securities in the companies he covers.