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40 million shares short would only be good in a short squeeze. I suppose it would be the mother of all short squeezes but only sales, delivery, revenue and profits will give birth to mother.
Nice site--thanks
Well they may be simple in your mind but a lot of work goes into the development and maintenance and understanding of them. Thanks for the informative post.
Hopefully the last 15 minute retrace will continue and we will not test that 2nd support again. That one was just a bit scary.
Now would be a great time for a big big order announcement. I'll sure be glad if the day comes where the short squeeze will be paypack time.
Whoever is the blame, the technicals are showing the beginning of a retrace.
To? Estimate? Do you mind posting one of your nice charts? You are certainly the best chartist I've ever seen.
My simple charts are showing deeply oversold and just tapped upward through lower bollinger, on daily one hour view.
Thanks
Thu Dec 6, 2012 3:55am EST from Reuters
UPDATE 4-US study says the more LNG exported the better
Depends on where you are in the fuel chain doesn't it? Is this good or bad for Capstone? Like I've mentioned before its a double edged sword in my mind.
The report states that there are 15 pending applications to be considered should the DOE approval go forward. Like I've also mentioned before the World Energy Reports are predicting that only 5 of these will make it to and through the construction phase. This is anywhere between 4 and 6 years out in any case.
Not exactly a great start to the day. What happened, did someone upgrade us?
Ha! Good humor needed. Thanks
Almost 2x yesterday's volume in first 25 minutes, mostly sells. This isn't pretty at all. Are the shorter's shorting at a lower low now? Tax selling, or just bailing?
It will take awhile to construct the liquefaction plants but they will come. Not all will make it past the very high price of construction--my sources predict perhaps 5 at most will. Nevertheless, with the prospect of selling gas at higher prices overseas the wells will start to be developed again and hopefully Capstone will continue to penetrate the market. This too will take some time as the first plant already in the construction phase, Chaniere's Sabine Pass (LNG) plant, is not expected to load its first cargo until Q4 2015 and that date is likely to slip. Just as an aside this company was trading at @2.50 just over 2 years ago. Also, Japan is now trying to link gas prices to Henry Hub rather than oil which could further ding any new plans.
US LNG exports to benefit the U.S. economy-DOE backed study
Looks as if the Argentina Prez is getting real serious about bringing that gas to market, via State Controlled Energy Company YPF.
Thanks to Jesinternational at IV for the info:
Latin America...a sleeping giant?
First the U.S Commerce Department sponsors a CPST
business meeting at the U.S Embassy with Oil & Gas
largest companies in the area...
Now we learn that the president of Argentina decides to move rather drastically to provide incentives for Shale Gas via high prices...and that
Chevron seems to be involved in some deals...
The above, is my interpretation reading Moonman's
post at Yahoo :
<< Argentine president Cristina Fernandez announced on Wednesday that wellhead natural gas prices are to rise substantially from current levels, an estimated 44%, with the purpose of attracting more investments and increasing production.
Argentina which is anxious to attract private investment to bring hefty shale energy resources on stream said wellhead prices would rise to 7.50 dollars per million British Thermal Units (BTU)...
“We've decided to give incentives for gas production” Cristina Fernandez said at the end of an industrial forum to which was also invited her peer from Brazil, Dilma Rousseff...
state-controlled energy company YPF hopes to lure partners to invest in the Vaca Muerta shale site, which may hold enough resources to double Argentina's oil and natural gas output.
A US Department of Energy report shows Argentina holds more natural gas trapped in shale rock than in all of Europe - a 774-trillion-cubic-feet bounty that could transform the outlook for Western Hemisphere supply...
YPF and US-based Chevron Corp have already signed a deal to consider jointly exploring for shale oil and natural gas in Vaca Muerta.>>
Thanks for the dialog.
PPS had already broken down, and he probably didn't know, just like the rest of us, what the actual bottom would be. You can include me in "the rest of us" as I was worried that it would break down past .86 which could have gotten pretty ugly.
Heck, as far as advising when to get in or out I have enough issues advising myself on where the entry or exit is; nature of the beast and a high stakes game.
Anytime Nationalization is in the conversation, especially in S. America, folks get a bit wary of investing capital there, including their capital assets. I traded a driller, Helmerich & Payne (HP) a couple of years ago and our friend Hugo decided to nationalize 11 their very expensive rigs. Check out Thomson Reuters for details.
Just a cautionary tale concerning nationalization. As you point out several nations, the IMF and World Bank have criticized Argentina. I'm sure President Cristina Fernandez de Kirchner feels remorse as she moves forward regardless.
It is sort of ironic that Spain, who once plundered the world and then went on to conquer Argentina, Bolivia, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay and Venezuela, wiping out the Incas in Peru and the Mayans in Yucatan in the process, is now crying foul and is going to retaliate economically.
Well put and I hope you are correct. I sure hope that VFC is turning those shares at a higher price; his guidance seems to indicate that is what he does. Just out of curiosity, I wonder why he didn't recommend buying near the mid-80s?
My concern on the lack of new orders being announced is that they are a leading indicator of the growth of the company. If the orders were rolling in there would be no need for speculation, or conjecture, that "Capstone's time has come" or that "profits are just around the corner." Of course as DJ has reminded us..."what is a quarter, a year or two push-out of an order to them?" It sure would be nice if that back-log was composed of "we need them now" type of orders that would require a ramp-up of production, that hopefully in turn would result in a reduction of materials costs.
From Seeking Alpha December 3, 2012
Natural Gas Production Decline May Have Started In September Its getting more and more difficult to get the price of gas up. Gas futures are also dropping on an estimated warmer winter at the same time storage is up as is production. All things being equal gas prices could head southward real quick if this winter mirrors that of 2011-2012. See the Mild Weather Forecast from NASDAQ
This all adds up to a double edged sword for Capstone, i.e. low gas prices are good for the power generation side, but less so on the production side should the rig count continue downward.
From the WSJ--estimated worldwide shale gas plays. Hopefully the link will stay up. Of special note take a look at Argentina which has the 3rd largest footprint behind China and the US. Hopefully the recently held meeting at the US Embassy will jump start the industry down that way. Just in case the image is no longer available China is listed as having 1,275 trillion cubic feet (although mostly very difficult to tap and without infrastructure,) the US 862 and Argentina at 774.
Looks like the Image link isn't going to work, but in addition to the above this paragraph about Argentina from the "Global Gas Push Stalls" would certainly give one pause for reflection prior to committing resources there:
Argentina recently nationalized the assets of a Spanish company that discovered an enormous shale deposit there that is estimated to hold nearly one billion barrels of oil. This has chilled outside investment, which already suffered from rules that made it difficult to import needed technology and export potential profits. Houston-based Apache Corp., APA -0.07% which holds rights to drill in 450,000 acres of Argentine shale, says it can cost twice as much to drill a well there as the U.S., and then two to four times as much to frack the well so it can begin producing.
This should also "chill" Capstone into a take a slow and careful stance concerning doing business there. I would think payment in full prior to any product leaving the shipping dock would ice the cake quite well.
Well, I'll give VFC's Steak House, err, Stock House, credit for continuing to gnaw at the bone. Nothing new from VFC except buy at a dollar rather than a $1.05 $1.06 levels for a nice trade. Depending on your trade, short or long, that last 20 cent downward move and the 10 cent retrace could have been naughty or nice. I wish I could say that I hear those sleigh bells a'ringing.
All of the recent exposure is great, but it is meaningless unless it translates into sales and deliveries; speaking of which... the last sale was announced on 10/22/12.
In paragraph 6 the following was highlighted from my perspective, although neither is anything new:
The problem, thus far, for this company has been reaching profitability. Investors look to the encouraging trends posted in recent earnings reports as positive indications that profitability is within reach, but some still predict that it will be years before the company gets there — although fairly significant improvement in overall margins should also be noted. I do take note of the margin improvements btw.
Just as an aside... the WSJ on December 2 headlines Global Gas Push Stalls --Firms Hit Hurdles Trying to Replicate U.S. Success Abroad. Interesting reading if the link is still up. Reading between the lines our (Capstone's) playground is still right here in the good old USA. Will opportunities still present themselves in Australia and S. America? I believe so, but not at the pace that was hoped for. Still awaiting word of Origin's "talking about using 1000 C-1000s." Something positive on that front could give us a much needed boost.
I think Capstone should put a C1000 on a flatbed, with a salesman riding shotgun, and drive out to Logan County. Stop by and give Slawson Exploration a first hand look. "You want to drill and then pump? Here's your solution, no need to wait for the grid."
“These operators need to talk to their neighbors,” he said. “If I'm drilling 10 acres here and you're drilling six acres there, let's go in together. But in many cases, the operators still aren't talking to each other.”
Makes more sense to talk to Capstone!
Check out paragraphs 5 and 6
November 25, 2012, 4:27 p.m. ET
In Sandy's Wake, Time to Upgrade the Power Grid
By GEORGE PATAKI
Superstorm Sandy exposed perhaps the greatest flaw underpinning the American way of life: insecure and unreliable electrical infrastructure. Four weeks after the storm, thousands of people in New York and New Jersey remain without power.
How did this happen? Under normal conditions, the energy systems of these areas are a complex but reliable network of pipelines, power plants, poles and wires. Under the stress of a major storm, however, these systems have proven inadequate in responding and recovering.
To make our electrical grid more reliable, serious consideration has to be given to burying electrical-distribution networks underground. This costly but critical investment would eliminate the need for utility poles and overhead wires, drastically reducing the need for repairs caused by wind and tree damage. New York's Consolidated Edison ED +1.44% is considering burying power lines, but it won't be easy because utilities must earn government approval for rate increases before making most improvements. New Yorkers already pay some of the highest electricity rates in the country, so hardening the system while keeping rates down will require creativity.
Another priority should be to harden and modernize the transmission systems that carry high-voltage electricity from large power plants down to the local distribution level. Modernization includes increasing the use of high-voltage direct-current (DC) transmission lines, which are less prone to failure than the alternating-current (AC) systems used throughout the country. DC lines can be buried underground or underwater, as is the Cross Sound Cable between Connecticut and Long Island, helping to enhance their reliability. (Conventional high-voltage AC lines can be placed below ground, but doing so is very costly when long distances are involved.)
Damage to substations, poles, transformers and power lines causes most power outages during storms. Even so, improvements to other parts of the grid can protect us against disasters. One improvement would be to expand the use of distributed power generation through fuel cells, microturbines, and the simultaneous "cogeneration" of both heat and power.
Such distributed power sources have very small installation footprints—fitting even on the roof of a building—and can provide secure power regardless of other outages on the electrical grid. During and after Sandy, cogeneration allowed pockets of New York City (such as the large Co-op City neighborhood) never to lose electricity or heat. Crucially, favorable amortization schedules and tax treatment, along with operational cost savings, can make these power sources attractive investments for building owners and other investors. They can even generate revenue by selling excess electricity back into the marketplace during times of peak demand, a practice known as demand response.
Finally, the way the Federal Emergency Management Agency works with electrical utilities after disasters needs reform. Under the current system, utilities receive federal emergency funding to replace damaged electrical components only if they replace them "in-kind" with the same technology. This means that all sorts of antiquated components are simply being replaced. This makes no sense. The federal government should promote modern technologies and best practices.
Officials at all levels of government should work to ensure that structures rebuilt after Sandy are more resilient and energy-efficient than their predecessors. They can do this by continuing to expand smart-grid technologies such as advanced meters, which communicate concise and instant information to repair teams in the event of an outage, instead of relying on customers to report general information via telephone.
Likewise, so-called self-healing transmission and electric-system technology can help the electrical grid react to system damage as it occurs by isolating outages. So instead of a blown transformer triggering a widespread power outage, the grid can automatically reroute electrical current to avoid the damaged area. Some parts of New York and New Jersey already use this technology, but it can be far more widely adopted.
No matter what, our utilities and governments will spend tens of billions of dollars repairing the damage caused last month. The question is whether Hurricane Sandy will be remembered as the moment America began embracing strategic infrastructure change, or as yet another wasted opportunity to move the country in the right direction.
Mr. Pataki, counsel to Chadbourne & Park LLP and chairman of the Pataki-Cahill Group, served as New York governor (1995-2006) and led the founding of the Regional Greenhouse Gas Initiative in 2003.
A version of this article appeared November 26, 2012, on page A15 in the U.S. edition of The Wall Street Journal, with the headline: In Sandy's Wake, Time to Upgrade the Power Grid.
AUSTRALIA PACIFIC LNG PROJECT AWARDS CSG DRILLING CONTRACT TO TITAN ENERGY RIG BUSINESS
Australia Pacific LNG, the joint venture between ConocoPhillips, Sinopec and the local Origin Energy, awarded a long-term rig contract for drilling at coal-seam gas wells in Queensland. The deal for Titan Energy Services is connected with the development of Australia's largest CSG reserves, held by Origin and its partners in the Surat and Bowen basins, and to be transported by a 530-kilometres pipeline to the LNG plant under construction on Curtis Island, near the port of Gladstone.
APLNG is one of three CSG-to-LNG projects under development on Curtis Island. Each will require several thousand producing CSG wells over the life-span of the liquefaction plants.
Titan said the rig contract was for six months with a six-month option and without the renewal would still be worth more than $5 million. Titan Managing Director Jim Sturgess said Titan subsidiary Atlas Drilling would execute the contract with a SchrammTXD rig and it's expected to be operational by next month.
"This is another significant agreement for Titan and Atlas Drilling and enhances the business's reputation as a valued partner to the major CSG companies," Sturgess said.
"While this new agreement will not affect our guidance for the year, it provides a level of earnings certainty and highlights the great progress Atlas and Titan have made in a relatively short period of time," he added.
LNG Journal 26/11/2012
Come to Capstone's Table Origin
Well what I meant to say was "I noticed your post was missing." No criticism meant (I guess I was responding while you were revising.)
Nevertheless, a pint 'o grog sounds pretty good right now, although Cap is showing some signs of life. I'll take the 2% anytime as opposed to the alternative.
Capt'n -- for some your post 14125 has been removed. I agree with most of what you had to say there with a few exceptions...
"New" management wasn't here 6 years ago. Since Jamison became CEO, CPST has turned around completely and posted improved numbers ever since. Mr. Jamison joined Capstone Turbine Corporation on December 18, 2006. Okay, I was off a week or two about DJ. The majority of the remaining upper management team has been in place 4 to 5 years. I agree that they too have a personal stake in making the company profitable but we do disagree on what is suitable compensation. No problem with that. As far as the Fortune 500s I agree with you also (heck, look at the fix Meg Whitman is in right now.)
I think you are wasting your time stressing the warranty costs as a problem. CPST's natural warrantly level is insignificant at only $.5 million in 2Q. 40% of reliable warranty adjustments in the quarter are related to logistics, freight and VAT. Yes, I saw that in the 2Q but the answer was, as you pointed out, "the natural warranty" not the unexpected warranty that is also of a concern to management who also stated that it isn't going away as quickly as once hoped. Bringing in Paul Campbell to assist in this area was a good move.
Officers only get royalties if they meet their given objectives. Reread my post wherein I was speaking about Royalties to UTC.
You should know that Safe Harbor statements are given by EVERY company before reports. They mean nothing and only serve as legal protections. To hint that they are in some way a predictor of future performance is very misleading and fear mongering and a diservice to investors..... Of course I'm aware of Safe Harbor statements and I didn't make a hint that they were a predictor of future performance. Most all of them I read actually disclaim that past performance is no indicator of future performance. I was simply comparing the length and detail of two different ones Q3 2012 and Q2 2013 -- take a look. The comment about accountants was basically tongue in cheek (could have said the same about attorneys too--sort of comes with the territory. Check out Meg Whitman/Autonomy/Deloitte for an example) There was absolutely no intent to mislead or instill fear, and my comment was not meant as a disservice.
I am still invested in Capstone and do dedicate a considerable amount of time researching and writing, in an attempt to offer another viewpoint, information for discussion, and answering other members questions to the best of my ability. I don't expect that everyone is going to agree with my views, but nevertheless I can throw my two cents in, at least I hope I can.
Thanks for the real facts BTW. It is good to be reminded of them occasionally and perhaps you could venture into deeper waters and answer the question posed as to why the pps is below a buck. As McMurphy said in One Flew Over the Cucoo's Nest "But I tried, didn't I? Goshdarnit (sic), at least I did that.
What does this have to do with CPST ??
Australia is presently forcast to Rise as the World's Largest LNG Exporter by 2018. Capstone already has established itself as an "electrification" solution for some of the vast infrastructure that is already built and hopefully new projects to be constructed.
Due inflationary, environmental concerns (adds to costs) labor shortages, etc. Santos is seeking collaboration among all of the players to find efficiency solutions to keep the development plans moving forward. So goes the market...so goes potential sales for Capstone Turbines down unda.
Lack of profitability, no guarantee of profitability in the future, too many shares outstanding, shorter's, ongoing warranty costs, royalities to UTC, high cost of materials, overhead, utility costs (LOL)? Take your pick. Take a look at Q2 2013 Conference Call and you tell me. I didn't answer Lloyd's question did I? I did allude to "new" management's inability to turn a profit in 6 years and did provide a fairly broad overview of the potential market where that profit hopefully can materialize. I still contend that the high compensation of upper management is out of line considering the warranty cost, and royalties both of which materialized under present management's tenure. Perhaps off-setting some of the aforementioned costs should come out of managements hide, not ours. There are brighter bulbs on this hub than I that may be able to answer the question for you.
Take a look at Jayme L. Brooks's - Chief Accounting Officer and Vice President of Finance disclaimer, at the beginning of Q3 2012, wherein she pretty much sums up all of the land mines that may affect forward looking projections. Compare that disclaimer to Q2 2013 which is much shorter. Makes one wonder, especially when accountants are involved.
Santos Seeks Collaboration With Rivals Amid Rising Cost Threat
Santos Ltd. (STO), building a liquefied natural gas project in Queensland state, plans to collaborate with rivals to cut costs as rising expenses threaten $156 billion of developments proposed by the industry in Australia.
Darren R. Jamison --$932,000 calculated 2012 compensation isn't too shabby for a CEO, President, and director of a company that has yet to make money. Go back and listen/read to the previous 4 to 5 years CCs and you will hear or read a common refrain of Y/Y growth, a certain product will be the turning point, warranty cost, royalties, this or that distributor needs weed and feed, backlogs, and expectations of profitability being just a year or so out, etc.
Think about this... DJ came "onboard" in 2006. As recently as 2008, most forecasts showed the United States growing increasingly dependent on imports of liquefied natural gas (LNG)--A Paradigm Shift A few short years later that whole forecast was turned on its head by new technology (mainly directional drilling and fracking) to release a glut of domestic shell gas. 10s of thousands of wells have been drilled; many now closed in awaiting infrastructure and a favorable prices.
U.S. gas production has increased 28% since 2005. In 2011 about a third of that production was from shale gas, up from just 11% in 2008. By 2035, according to a study by the research firm IHS Global Insight, shale gas will account for 60% of U.S. production. DJ states that the oil and gas industry accounts for the lion's share of sales and is likely to remain so. Had it not been for this whole new oil and gas extraction technology would Capstone still be in business? I personally doubt it.
On the other hand we are entering The Golden Age of Natural Gas Although the predictions for domestic production here in the USA alone are impressive, the global predictions for drilling and production are staggering. This too is the Golden Age for Capstone if management is able to execute business plans and deeply penetrate this market quickly enough (perhaps the Origin/Aquatec-Maxcon talk of of 100 C1000s will translate into sales and deliveries and will clear the path.) Let's hope so, as the golden ring only comes around once most of the time.
There has never before been such an opportunity for Capstone, and in my opinion if they can't execute and turn a profit in this environment the end of the company is inevitable. At the moment the oil and gas industry is our playground, but other companies and technologies are making inroads. The time has arrived to execute and survive, or be shunted aside with nothing but a long history of hope and projections left as evidence of what might have been.
APLNG Begins Drawing from USD 8.5 Billion Funding Facility (Australia). Doing a search filtered to the last 24 hours reveals plenty of key jobs just posted.
Previous articles have pointed out that Origin Energy, a partner in the APLNG Project will be the project construction firm as well as the operator and maintenance service contractor. Looking at the following link highlights that Origin will provide the "Electrification for high reliability and low maintenance" as well as pipeline and facility completion for ramp up. APLNG Project Overview. I'll attempt to relocate the other articles to confirm Origin's participation and what technology will be used for "electrification." Let's hope that the talks of 100 Capstone C1000s continue and will result in firm orders.
From Capstone's Distributor site Aquatec-Maxcon is listed as a "Distributer" in Australia. On Aquatec-Maxon's site under the Coal Seam tab there is quite a bit of information about supplying Capstone MTs to Origin Energy.
We've all heard repeated stories about the Origin Energy's 530LM pipeline construction and operation project The Australian Pacific LNG Project (APLNG) from Queensland to Curtis Island, offshore from Gladstone and the use of Capstone Turbines at pumping stations, e.g. quote from DJ during Q22013 CC Q&A "Origin Energy is still talking about a 100 units order." Okay, they are still talking about it as of the date of the CC according to DJ while alluding to the C1000. Now it seems that things get dicer.
When searching Origin Energy it seems that various factors are causing many participants in the project to rethink their plans. Shell may bail and other Coal Seam Project Owner's scramble to sell (down stakes.) BG Group sold a 40 percent stake in its Queensland Curtis LNG development earlier this month to China's CNOOC Group for $1.93 billion.
Origin Energy and Conoco Phillips are each looking to sell down 7.5 percent stakes in their Australia Pacific LNG project to cut their holdings to 30 percent each, having already sold a 25 percent stake to China's Sinopec. It seems that a bit of irrational exuberance has created a hangover down unda. See Reuters article coming just one day on the heals of the announced finalized financing agreement for this huge project.
It seems to me that the major players are looking to spread or reduce their risk although it appears that the APLNG Project will move forward thanks in part to China. Is Origin still talking about Capstone? Good question to ponder while noting that Capstone has a job offering for a Regional Sales Manager, Australia on their site. Not sure what that portends, or means, for the Aquatec-Mascon/Origin relationship if anything.
Finally, it being tomorrow in Australia, we get this from the Brisbane Times thrown on our doorsteps a day early--Expect skepticism over gas industry-funded research. No wonder the whole dang industry seems so schizophrenic lately. Makes one want to enjoy a Happy Meal for Thanksgiving.
Well, what an exciting morning. If we break .86 next stop looks like the .76 to .80 range to me.
My charts are showing the last time we closed below today's close of $0.8914 was October 3, 2011 @ 0.86. It was December 10, 2010 that the PPS closed above 89 cents (at 92 cents) and completed the run to $2.08 (The Reward) on March 23, 2011. Just as a refresher take a look at the Seeking Alpha article on the same date-- Capstone's Presidential Mention Puts It in the Big Leagues.
Since that time it appears that we were slowly being sent back to the minors. A few taps on a $1.68 - $1.50 range June 28 - July 26, 2011 prior to closing and staying below the $1.50 support since July 27, 2011. It wasn't until February 7, 2012 that the PPS closed at the next high of $1.46; just two days before the Q3-2012 CC. Since then its been a slow ride down the foothills and sideways in the meadows.
Anyway, it does not appear to bode well considering the action today, but then again some of the same sort of dynamics were in play back in 2011 as are going on today, albeit they are bit more serious lately, at which time Seeking Alpha states in the linked article "it's no wonder that its being recognized by Washington as a potential mascot for America's business strategies of the future." The only reference to a Mascot that I can find today is our not so rough and tough looking Captain Microturbine. Hello marketing people!
I do ponder what effect, on Capstone sales, that the current shooting match over in the Persian Gulf may have, as this dust-up has the potential of choking off oil and natural gas exports at the Strait of Hurmuz at one end and the Suez Canal on the other. It would seem certain that Capstone's wide sales distribution footprint and domestic shale gas plays are certainly good to have, and may in fact keep us afloat should the Gulf be closed off. Only time will tell as you say Lloyd.
Looks like everyone around here went to the Hampton's for the day. Looking around for any info at all and this is about it. Should be interesting how this management meeting goes.
Lazard Capital Markets
November 27, 2012 Capstone Turbine Corporation (CPST) Management Meetings Houston, TX
November 27, 2012 Capstone Turbine Corporation (CPST) Management Meetings Dallas, TX
Sanjay Shrestha
Sanjay Shrestha is a Managing Director and senior analyst at Lazard Capital Markets covering Alternative Energy. Prior to joining LCM in February 2007, Mr. Shrestha was a managing director and senior research analyst at First Albany Capital, where he built the firm’s alternative energy and industrial research practice. During his seven-year tenure at First Albany, he hosted specialized and focused industry conferences, including solar conferences and electric transmission and distribution conferences.
Prior to joining First Albany in 2000, Mr. Shrestha was an analyst at C.L King and Associates, where he covered the broad industrial sector. Prior to that, he gained experience as a consultant in retail banking and as a software entrepreneur.
Mr. Shrestha has been recognized by Forbes/Starmine as the #1 Earnings Estimator for 2006 and the #1 Stock Picker for 2007. He was recently ranked top five global stock pickers by Bloomberg magazine. He is often quoted as an industry expert in by the media including: The Wall Street Journal, Investor’s Business Daily, Barron’s, Business Week, Forbes, CNN, CNBC, and CNNfn. Mr. Shrestha has been keynote speaker at NYSSA’s Annual Alternative Energy Conference each year since its inception in 2003.
Well, I couldn't agree more. Here we are today in a total disconnect with the markets as a whole--go figure. About the only thing I can see happening to change the direction is an announcement of a huge deal, or existing deal, for near term and long term delivery for Capstones as fast as they can be produced.
No amount of chatter "talking" this stock up is going to do the trick unless the Prez says it, even then he has a credibility gap considering how some of the biggest names that received grants went down in flames.
Will the shorter's short at this level? Are the IHs done "walking" the stock down for some big client, as we are told they do so often? Perhaps the reason for us being in the 88s again is simply fundamental. Talk the talk, walk the walk, but in the end XX walks and money talks.
Just a WAG on my part of course (not even humble about it.) I feel your pain, but if it makes you feel better we are reminded that buys in the past at the $1.00 and $1.05 levels were sometimes rewarded with runs to a buck fifty and even 2 dollars--I'm primed and ready to reap my rewards; just waiting and waiting and looking at downward trend since last CC and the last CC etc.
Update on Australia Pacific LNG’s US$8.5 billion project finance facility A ways off but still on the radar. Thanks to yormom @ IV for the link.
Now a little more background on the export and import of energy resources here and there...
Interesting that the Australian Government is also looking into the impact of exports on future domestic growth as is the DOE here. Should be interesting what the final say is on our own future pending exports.
Australia backs LNG exports as supply crunch looms
Energy White Paper 2012
Australia natural gas: Unintended consequences This one is really interesting.
Here is another interesting reverse concept of the latter link and what is happening in Sabine Pass right now. Of course, Cheniere already has the import capability.
Indonesia: Rekayasa Wins Arun LNG Contract from Pertamina What the article fails to mention is that the bulk of the recoverable supply of Natural Gas in the Ache region of Sumatra, Indonesia was exported to Japan since the plant commissioning in 1978. A great title for a paper on this situation would be "How not to develop, monetize and export all hydrocarbon based resources in a third-world hinterland, only to require ‘restocking’ from external supply sources, in order to keep people employed, healthy and supplied with adequate food stocks."
Indonesian 2012 LNG exports may be down 36% year-on-year
So much for the "market as a whole" dragging Capstone down. Right now presently off $0.0083 from the day low. NASDAQ up 50 and DOW 168 points. Wonder what it would be doing if caught in another 200 point downdraft?
One key with the turbines is they run on almost anything. NG's a natural, but if you've gotta fill up and NG's not available, a multifuel capability would be golden. It'll take awhile but beats the crap out of batteries!
From Capstone's "Ask Management" July 16, 2012
Question: Can an MT be installed to use Diesel, then changed to use NG, or possibly configured to both fuels?
Captain Microturbine answered the first part of the question but fails to address the the second. See the link for the answer.
Caspstones, as we know, are a natural for methane be it extracted, bio-produced, a by-product like sour gas or otherwise flared. Diesel is also a very viable fuel in many applications for a MT.
Slow speed diesels are already running with tri-fuel configurations wherein the owner/operator can select Natural Gas, Marine Diesel Oil, or Heavy fuel oil depending on pricing, application, and or location. This type of engine is used exclusively in the large ship sector of marine transportation and the forgoing is for illustrative purposes.
As mentioned in a prior posting Westport already has a conversion kit, albeit expensive, to convert a standard diesel engine, mainly in the heavy trucking industry, i.e. Class 7 and 8, to enable them run on methane. I'm personally not aware of a true duel fuel truck diesel--meaning that there could be a seamless switch-over from diesel fuel to methane (natural gas.) There are duel mixed fuel engines but they require some type of spark ignition.
For this discussion I don't see micro-turbines making inroads into the Class 7 or 8 trucking industry anytime in the near future nor will methane (natural gas) on a large scale. It sounds great until you start getting into torque, fueling, onboard fuel storage and price spreads. I of course could be wrong, but take a look at Advancing Technology for America’s Transportation future and make up your own mind. On the other hand I like what I see with the Wrightspeed Route.
I totally agree with you on the battery issue, although for a small micro-turbine to be utilized as a range extender we need them. Then again...natural gas to liquids technology would eliminate the need for batteries and expensive storage and refueling infrastructure.
Just to throw a couple of other fuels into the mix check out diesel made from natural gas. Will this product meet EPA guidlines? Will it happen on a large scale in the US in my lifetime? I doubt it.
I'll try again. It would seem that anytime a contributor mentions anything perceived as negative about Capstone that viewpoint is promptly taken apart piece by piece. At the same time we are continually reminded "its only matter of time" and "now is a great time to buy" on a regular basis. Positive spin is always placed on CCs and Annual Reports by a particular contributor. I can't remember ever reading anything negative although I would love to be proven wrong.
Now we learn that "I trade the here and now." No surprise there as the individual has stated many times that he is a trader. Perhaps those runs from .95/.98 cents are worth the trading, I'm not disputing that at all, and it is all a matter of personal investment style and the view of the market.
The rub comes again from the reply to a long term investor. There are many no where as sophisticated as the individual responder and who rely on the experience, charts, and perceptions of the individual to formulate their opinions. If every thing is presented through rose colored glasses there is a credibility gap IMO. Perhaps sharing the projected entry and selling points would be beneficial to those who rely on information posted on this board. Then again, as luck would have it, the security probably would not perform as predicted. All trading is risky, no matter the style.
Yesterday's filing came across my platform and I gave it a pretty good look, the same as you. As of then I have not received an amended report as you mention. My platform still list the IH as holding 15.2 million shares. Nevertheless, the pps is off almost 3% today, although an argument could be made it is in sync with the market as a whole.
I don't stress over whether this particular Institutional Holder sells shares as it is CPST's largest and most aggressive shorter A 75% mistake in a SEC filing by a major holder of a penny stock is unlikely. On the other hand the sale of that many shares would certainly have a depressive effect on the pps and could certainly move it in the direction most favorable to them could it not?
You have mentioned that you are covered on both sides--lately the shorter's have been booking more profits than the sellers. Good for them. Its just not my cup of tea to bet against a company I believe in, although I do believe in protecting my assets and taking gains when warranted. I am not adverse to taking a loss if that seems to be prudent to me--I don't fall in love with a stock.
Apparently you missed the huge swings that afforded you opportunities to make tremendous, profitable trades. If you would have traded them, you would still be bug eyed with a bundle of $, I assure you.If you remain glassy eyed, you will miss your opportunity again.
You have mentioned previously that you "could care a wit about my trading style." But here you go doing just that. That being said I do take some gains when the opportunity arises. As I stated the "glassy eyed" view comes with hearing the same mantra repeated about once a month. Quite a feat for you to assume to know what I may and may not have done. No problem though.
one reason for these new buyers was that there was a substantial factory warranty to back up the new and innovative technology. Buyers continue to line up with the C-200s
Yes, but even so, do you think the buyers would have been in such a rush, regardless of the warranty, if they knew there was a possible warranty issue looming? I would suspect that Capstone Management wasn't aware of the issue and it started appearing after the units had put in substantial field time. Taking a unit off the line has consequences. The bragging about shipping the initial units before scheduled in retrospect appears to be a not so good choice, but I would think that the newly hired DJ wanted to demonstrate he could perform JMO. That performance has come back to bite the company real bad. Has he stepped up to rectify the situation. Yes. Has he before? To some extent as I understand the CCs. It according to my interpretation is a growing phenomena that isn't going away anytime soon (listen to the CC)to which DG hired the ace from Rolls Royce. Perhaps this should have been done earlier, I really don't know, but it does appear to be serious.
You haven't been here long and apparently don't remember much about the reorganization and the initiation of the new sales and distribution chain which did not exist at that time or their development and improvements.
I've followed Capstone for about as long as they have been in business. Thank goodness that I didn't buy it at its peak. I venture to say that I've operated, started up, shut down, repaired, witnessed all construction phases, both domestically and abroad, and performed owner inspections on more turbines than you've seen or dreamed about. All sizes and applications. If the comment above applies to me being on this board, which I don't think you imply, you are correct. Have I learned here? Yes. Do I have more to learn? Yes. I think you need to loosen up a bit? Yes but it is your game of marbles.
Everything you complain about here is what Jamison has, himself, already reported and addressed in the CCs.
You seem to think that anything not in line with your own opinions are a complaint. On the other hand you continually encourage participants to listen to the CCs and read the annual reports. We all come away with our own interpretations you included. One of my main points in the posting is that earlier mistakes are harming the bottom line. Are they being fixed? DJ said they were and I have no problem with that--re-read my post. They must be to protect the brand. There are plenty who complain here and you take them to task also (I'm not complaining btw.) I attempt to illustrate my comments with facts as I did on the post we are debating. There is always going to be opinion just as there are always going to be analysist. Most include IMO to reinforce that fact.
There are many here who can learn from healthy dialog, even historical issues. The more we know about where the company has been hopefully the more we'll learn about where it is going.
All of that being said that are many varibles that can and will affect this technology. Listen to the CCs and you'll hear about some of them.
Nice presentation on GE Micro LNG Integrated Plant. Thanks to yormom at IV for the link.
This is about as uplifting as the market as a whole. Unloading over 4 million shares by # 3 ranked, by total shares held, IH GILDER, GAGNON, HOWE & CO. isn't exactly a vote of confidence; although I suppose it could have been worse as they slip to position # 4 for now. Hope this doesn't start a new trend, but then again we are continually reminded that "Historically speaking, however, purchases of this stock in the dollar range have been handsomely rewarded with speculative spikes to the $1.50-$2 range. Worth keeping an eye on." My eyes are starting to glass over quite frankly with that regurgitated comment.
DJ says that one key metric to profitability is higher sales of the higher margin C800 and C1000--lets see some product shipments. During the same Q&A he hedged about how long the C200 warranty fiasco is going to continue draining resources. He states that they are taking things slowly (at least 18 months before anticipated roll out) on the C250, so as not to repeat past mistakes, on his watch, made in rolling out the C200, which was supposedly vetted and tested in a very careful and methodical way itself. It continues to be painfully obvious each quarter that it wasn't. Capstone touted the early roll out and ahead of schedule C200 in a News Release on August 28, 2008. So now DJ hires a Rolls Royce employee to hopefully get the not so ready for prime-time turbine up to spec--the alternative isn't pretty given that Capstone's "up time" is a main selling point. To my limited knowledge no one at Capstone has been called on the carpet to answer the question as to who is responsible for this "unexpected" premature or pending failure of units in the field although the same cast of characters continue to mime the same line as they did in the above link.
Connected at the hip are the Royalty payments to United Technologies Climate, Controls & Security division(UTC.) Ironically, "The second production C200 is scheduled for shipment to UTC Power Corporation" states Mark Gilbreth in the above linked Press Release. During the latest CC DJ stated that he would like to buy the UTC Royalty contract out, but taking a little history tour on the UT site demonstrates that they are quite adept at writing royalty contracts, therefore I would expect that a buy-out isn't in the cards and that this situation will continue to be a drag for some time to come, especially since it includes any derivative of the C200, i.e. the C600, C800, and the C1000. See The Development and License Agreement between Capstone Turbine Corporation (“Capstone”) and Carrier Corporation (“Carrier”), effective September 4, 2007 and as amended from time to time (“Development Agreement”) (1) for fun, facts, and figures.
For those who may think that 43K is chump change on a million dollar unit, that might be the case if we were wallowing in profits. Every dollar counts on the bottom line--a good illustration of that fact is that Q213 slide 10 lists "Increased Utility Cost" as one of the factors in the Gross Margin Analysis. I've asked this question recently, but received no answer--does Capstone practice what it preaches when it comes to CHP? Does the plant utilize a Capstone Turbine CHP unit? Granted this is but a small piece of the pie (although it made the slide presentation) but wouldn't a customer ask the same question? I'll pose the question to "Ask Management" and hope for a reply.
I only have myself to blame for not doing more due diligence on this company prior to taking my positions. Would I have taken the same hook line and sinker 6 years ago when DJ came onboard? Who knows, but then again Capstone is a "Story stock" and will continue to be one until either the story ends prematurely, due any amount of excuses given for lack of profitability, or they turn a buck and start a new book. JMHO, of course.
Wild-Bill,
I've pondered that particular post and I too was thinking out of the box. Like I mentioned...due the air bearing "shelf life" issue the point may be moot anyway. DJ also threw a new wrinkle into the matrix yesterday when he mentioned packaging desiccant packs in way of the air bearings to alleviate moisture damage to the bearings while being shipped and prior to commissioning. This was something that wasn't initially considered as posing a problem I would think. Apparently it is a moisture sensitive area which would again negate the potential for the Caps being used in dedicated standby mode, i.e. sitting idle and only starting up upon a grid power failure. That being said there are solutions to that issue, e.g. continuous dry air or nitrogen purging.
I would think that Capstone engineers have went down the path of using the units for emergency stand-by power, but due the nature of the beast they really aren't suitable, or cost effective, for the masses in that configuration.
Your comment about using the generator as a motor demonstrates that your "semi-engineering mind" harbors bit more depth there than you admit to. As to the thermal expansion issue I really don't know what the affect of that would be but it is a good point.
This afternoon I was driving behind a Publix Supermarket and noticed the big CAT DG set sitting there. It was elevated about 4 to 5 feet off the ground which is wise because it is on a barrier island. All of the Publix Markets were fitted with standby generators after the hurricanes of 2004. Since that time not one has been necessary due hurricane related power outages. It made me wonder about the condition of the fuel and filters and what if any PM is being done on them.
Thanks for the follow-up which provides something else to to ponder other than what the future holds for Capstone.
I still like CPST but thought the flat product revenue Q over Q was disappointing.
It would have been more disappointing had that 2 million in product sitting on the dock been shipped last quarter; Last quarter would have reflected 25.6 million and Q2 would have been 21.6 million in product revenue.