"5) Capstone Turbine Corporation (CPST): This manufacturer of microturbine energy systems has been losing money for four years now, despite the fact that the top line has been growing since 2009, and the gross profit has also been improving lately. However, the operating cash flow remains negative for many quarters.
The company does not have long-term debt, but is this enough to keep the company afloat for long? I think no, because the company's continuing losses reduce the stockholder equity gradually, and Capstone will have either to dilute or borrow money.
I also want to see an improvement at the accounts receivable, which have been holding steady with a slightly increasing trend lately. This is why I am not convinced why I have to pay such a huge premium (PBV=6) to buy Capstone currently.
From the operational front, Capstone is expanding to new sectors and different regions worldwide, but what matters at the end of the day is the company's bottom line and the operating cash flows.
If I had to pick a stock from the industrial sector, I would choose Bri-Chem Corporation (BRYFF.PK) for the reasons mentioned here. Bri-Chem's main listing is on Toronto stock exchange.
The douche that wrote that article just "feels" these things. He cites one or two balance sheet lines, ignores any other contrary information, then writes to "prove" his thesis. Really lame of Seeking Alpha to let him blather on.
Traders and investors need to realize that seekingAlpha is a blog anyone can write on. There are no qualifications whatsoever. The only reason it gets put on any Yahoo summary page is because Yahoo bought the blog 3 years ago and Yahoo doesn't care who writes what. Longs can mislead on it for personal advantage just as easily as the shorts do.
Stern, Investors pay for growth and CPST will grow substantially in every area as they continually refine their product. Cash flow...........are you kidding .............-.05 in cash flow and a fast CCC and a dillution they could have done recently but canceled mean they KNOW they have the sales and business to continue with no dilution. Again.................earnings per share is the only fair way to seperate the big dogs from the small ones. But you like cash flow? Peix has a positive cash flow of 0.7 but it is currently .38cents on the exchange with no dilution planned. JCP is about $17 dollars on the exchange with a -$3.31 in cash flow...............so who has to borrow money to continue operations?
At the very top of the article:
"Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in AKS, CIE, AOIFF.PK, CPST over the next 72 hours. (More...)"
Drive the prices down through fear, take your profit, then release another article expending the virtues and shiny futures of these companies. This guy is as much a loser as you sternbitchliar.
Agreed, that article was a hack job at best, and riddled with agenda at worst. I mean, FFS, he was talking about dilution . /facepalm. Dilution would be like 2 years away assuming the current cash burn. That is assuming there was no future improvements to the cash burn rate, which would fly in the face of the current financial trends at Capstone.
It was all rear view analysis. "Capstone has never made money" kinda stuff. Bashers are banking on the fact that people either dont, or dont know how to, read an income statement. That is the only thing keeping them in this game right now. People that can read an income statement and do a little back of the napkin projection, know whats going on.