Ocean Power Technologies Inc (NASDAQ:OPTT) Rockets on Deployment

Ocean Power Technologies Inc (NASDAQ:OPTT)

Shares of Ocean Power Technologies Inc (NASDAQ:OPTT) have exploded. The average daily volume for OPTT shares is just 255,310 but by 1PM EST over 13 million shares have traded hands. OPTT closed Friday at $1.83, gapped up to open at $3.45 and hit a high of $3.67 before retreating to trade around $2.60 with almost three hours of trading left.

The market appears to be responding to news that Ocean Power Technologies Inc (NASDAQ:OPTT) has launched its PB3 PowerBuoy off the coast of Japan. PowerBuoy is the company’s proprietary technology product that is designed to turn ocean waves into electricity while also offering enhanced communications and surveillance abilities o offshore operations. This technology is a unique entrant into the alternative energy sector. The deployment is part of a six-month lease agreement with Mitsui Engineering and Shipbuilding (MES). A joint team from Penta-Ocean Construction and MES deployed the technology.

Ocean Power Technologies Inc (NASDAQ:OPTT) believes the PowerBuoy serves multiple offshore uses. It can serve as a sub-sea and ocean surveillance tool for oil and gas operations as well as security systems. From an efficiency standpoint, the company believes that the implementation of the PowerBuoy can lower expenses by replacing on-site support vessels.

Ocean Power Technologies Inc (NASDAQ:OPTT) has a 52-week low of $1.37 and a 52-week high of $15.65. OPTT has a consensus target price of $6. However OPTT shareholders have experienced nothing ut losses in the past – though the losses are narrowing. In 2012 the EPS loss was (-$14.73) and that improved to a loss of (-$7.25) in 2016. Dilution has also been an issue for OPTT shareholders. In 2012 there were 1.03 million shares outstanding, and by 2016 that number had increased to 1.81 million. Interested investors should note two things. The firs is that the Relative strength figure for OPTT shares is 69. Many traders believe that a number of 70 represents shares in an “oversold” mode. Secondly, OPTT shares have a Beta of 4.38 which is high but not uncommon for stocks that have a high degree of risk.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.