Why Capstone Turbine Shares Exploded

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Capstone Turbine skyrocketed 13.59% as the company announced that it had signed a major supplier deal with private real estate and investment firm Related Companies. Shares of Capstone haven't been this high in over a year.

So what: No details regarding dollars were given in the announcement, but the deal is set to include several of Capstone's C65 and C200 Dual Mode microturbines over the next couple of years. This deal could also hint at a long-term relationship, as Related has stated it has commited to spending $10 billion in sustainable building designs. Hopefully, this will help Capstone in its long march toward profitability.

Now what: Potential investors in Capstone Turbine need to remember one thing: The company has yet to turn a profit. Analysts expect the company to go into the black in 2015. There is no doubt it has some of the best natural gas turbine tech out there, but the question remains whether it has the ability to sell its products and capture market share from manufacturing giants GE and Caterpillar.

The article Why Capstone Turbine Shares Exploded originally appeared on Fool.com.

Fool contributor Tyler Crowe has no position in any stocks mentioned. You can follow him at Fool.com under the handle TMFDirtyBird, on Google +, or on Twitter @TylerCroweFool. The Motley Fool owns shares of General Electric. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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