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Capstone Turbine Corporation (CPST) Should be Radared

It is always useful to repeat the stock market mantra; investing is about future business performance. Past achievements matter only if they increase forward strategic options, but in the end, no one knows for sure what tomorrow holds.

Here is a small-capital corporation from Chatsworth, CA with a mega-future. The stock is innocuously listed in the Miscellaneous Capital Goods Industry. It would be more appropriate in reality to put it in an energy transformation basket. This kind of business is our best collective hope for the future. What does this corporation do?

This company is a master of micro-turbines. You need at least one of this corporation’s products and services, whether you run a rig in the middle of an ocean, own a hybrid automobile, or live in an energy-efficient home. Micro-turbines are integral to decentralized power generation, and to use of alternative fuels as well. It is not unrealistic to imagine a future in which every home, office, vehicle, and industrial location has at least one micro-turbine in operation.

CPST has traded at less than a dollar during the year ended early-July 2008. It is now close to the 52-week high of $4.42. The Beta is less than one. Sales have grown annually by almost 60% on a Trailing Twelve Months Basis. Long Term Debt is miniscule compared to equity. The management has begun to appointment distributors in new markets. The stock appears to be positioned well for a future full of profits and growth.

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