We tend to try and avoid these stocks, but today’s hot stock comes from the hot Alternative Energy Stocks sector where most of the stocks are highfliers.
Ocean Power Technologies, Inc (OPTT) is a leading renewable energy company specializing in cost-effective, advanced, and environmentally sound offshore wave power technology. OPTT focuses on its proprietary PowerBuoy® technology, which captures wave energy using large floating buoys anchored to the sea bed and converts the energy into electricity using innovative power take-off systems.
Let’s face it, our government is about to spend hundreds of billions of dollars subsidizing green technologies. According to the Energy Information Administration, $1.6 trillion is expected to be spent on new renewable energy generation equipment by the year 2030. This equates to annual overall expenditures of approximately $60 billion. A small portion of President Obama’s promised $150 billion multi-year investment in green technology will have a significant impact on OPTT.
It’s your tax dollars, might as well take advantage of the influx of money and try to profit from it.
OPTT’s technology seems to be catching on with governments, states, agencies and utilities around the world.
- In September OPTT deployed its first commercial PowerBuoy in partnership with Iberdrola, one of the world’s largest renewal energy companies at a site approximately three miles off the coast of Santana, Spain.
- They are under contract with the Scottish government at the European Marine Energy Center or EMEC in the Orkney Islands, Scotland to deploy a PB 150 PowerBuoy which is expected to be ready for deployment by the end of 2009.
- OPTT is working in conjunction with the South West of England Regional Development Agency (SWERDA) on a Wave Hub project that is expected to be completed by the end of 2010.
- They launched a PowerBuoy off the coast of Hawaii in partnership with the U.S. Navy, which led to an additional award of $3,000,000.
- For the first time the Department of Energy has awarded a grant to aid the building of an ocean wave energy system. Ocean Power Technologies received a $2 million award from the U.S. Department of Energy for up to 10 150 kilowatt PowerBuoys for PNG Power near Reedsport, Oregon.
For a highflier, OPTT’s balance sheet is OK. At the end of its last quarter, OPTT had a record backlog of $8 million and nearly $89 million in investments, cash or cash equivalents. For long-term investors, this story is not about how the balance sheet looks today. It’s about how it might look 5 to 10 years from today.
The reason we highlighted OPTT in today’s report is because they are in a hot sector, met our screening criteria and its stock chart produced our favorite technical analysis buy signal, the positive MACD crossover. While OPTT might make plenty of people rich in 5 to 10 years, we hope our timing is right and our readers might profit from a stock that moves up widely in the near-term.
Suggested Stop: $6.20
