3 Stocks That Could Make Huge Moves This Week
Embed Size (px)
Transcript of 3 Stocks That Could Make Huge Moves This Week
3 Stocks That Could Make Huge Moves
GT Advanced Tech. (Nasdaq: GTAT)
Simple Explanation of the BusinessGT Advanced Technologies has many, many irons in the fire. Back in 2009, the company made 100% of its revenue by providing materials for solar panels.
Since then, however, it has expanded its reach significantly. The most well-publicized of its new ventures is in providing the Sapphire glass for Apple products. But it is also addressing crystal growth markets in industries from manufacturing to consumer electronics.
Why Are Investors So Negative?1. Though Apple is working with GT to open
its Arizona sapphire plant, the iMaker hasn’t confirmed that the sapphire will be on the new iPhone 6.
2. The company is not profitable over the trailing year, and is trading for over 400 times expected 2014 earnings.
Here’s What to WatchWall Street Expectations• Currently, 34% of GT’s shares
are sold short.
• Analysts are expecting the company to report revenues of $63.9 million for the quarter, and $685 million for the fiscal year.
• Earnings per share are expected to come in at a loss of $0.14 for the quarter, and a profit of $0.03 for the fiscal year.
What to Really Watch• The company expects to
make about 90% of its revenue for the year in the third and fourth quarters. While earnings this quarter aren’t unimportant, management’s outlook on the rest of the year will be critically important.
• Though it won’t surface this week, when the iPhone 6 comes out, all GT investors will be looking to see if the phone sells well, and if GT is providing the glass cover.
Capstone Turbine (Nasdaq: CPST)
Simple Explanation of the Business
Capstone makes gas turbine engines for power generation. What makes Capstone unique is that its engines only have one moving part, are more efficient that other types of engines, and can use multiple inputs to generate power.
Why Are Investors So Negative?1. Capstone operates in a very competitive
field, and against others who have much deeper pockets.
2. The company has never turned a profit.
3. Capstone has continually diluted shares in order to raise funds to run the business.
Here’s What to WatchWall Street Expectations• Currently, 16% of Capstone’s
shares are sold short.
• Analysts are predicting revenue of $32.8 million this quarter, and $157.6 million for the fiscal year.
• Earnings per share are expected to register at $0.00 for the quarter, and register a loss of $0.02 for the fiscal year.
What to Really WatchTwo key metrics should get your attention.1. Revenue has grown an average
of 13% over the last three quarters. Continued growth over 10% would be a good sign for investors.
2. The company continually highlights gross margins, and rightfully so. They need to continue inching up to become profitable. Last year, they stood at 16%, and investors should hope for even better this quarter.
Clean Energy Fuels (Nasdaq: CLNE)
Simple Explanation of the Business• Many people think that using natural gas—
instead of petroleum-based gasoline—is the future of transportation.
• To help that along, Clean Energy Fuels is building out the infrastructure necessary to support natural gas vehicles.
• One of its most important initiatives is building out natural gas fueling stations for cars and trucks to use near highways throughout the nation.
Why Are Investors So Negative?1. There is no guarantee that natural gas will
catch on beyond the businesses using it now. The price difference between natural gas and petroleum fluctuates, and natural may not be as financially advantageous to use in the future.
2. Clean Energy has yet to turn a profit since going public.
3. Clean Energy’s volume of gallon equivalents sold is not growing fast enough for many investors.
Here’s What to WatchWall Street Expectations• Currently, 24% of Clean
Energy’s shares are sold short.
• Revenue is expected to come in at $93.5 million for the quarter and $398.8 million for the fiscal year.
• Analysts are predicting a loss of $0.28 per share for the quarter, and a loss of $1.07 for the fiscal year.
What to Really Watch• Check and see what kind of
margins Clean Energy achieves per gallon. Earlier this year, the volume of gallons went up, but revenue did not keep pace.
• Overall volume of gallon equivalents sold will be a good indicator of whether or not growth is really slowing. Investors should hope for growth above 15%.
Risk Free for 30 Days:
The Motley Fool’s Flagship Service