Break-Out Performers: POWR, CAST, OPTT

Trends, Charts and Exclusive Opinion

Three SmallCaps Claim and Reclaim New Price Levels and Climb

POWR: Grid and Energy Efficiency Co Takes Back Some Lost Value

CAST: Trading on the Top-Tier of NASDAQ Can Be Dizzying

OPTT: New Contracts and Momentum of New CEO Pushes Stock Higher

Gaining as much as 14.94% this morning is PowerSecure International Inc., (POWR) http://www.powersecure.com/ currently trading in the $6.74 range. POWR has a 3-Month average daily trading volume of 117,294 shares. POWR has a 52-week high of $10.25 set on 10-21-09. POWR has trailing twelve month revenues of $98+ million and a positive, corresponding diluted EPS of $0.13. POWR had a nice, steady climb from $4 in April to the $10 range in October; then it began a slide... and thus a mystery developed for me, and in the past 3-Months dropped down into its current $6+ range. POWR is a near-term (3 Mo) ‘Buy’ for me at this price with one reservation: What happened in October. A call to POWR Investor relations or the transfer agent should clear up the mystery.

There was something that caused the downward pressure from $10 to $6 but darned if I can find it. Perhaps there’s a clue if you’ve got level II trading. With 14+ million in the public float, POWR has a very normal 3.90% ratio of short sellers as of 12-31-09 and shorters actually decreased from Nov. A lot of institutions own POWR, upwards of 60% of the float, so there’s nothing unusual there, but why the drop?

The Company issued a press release on Oct 14 (about the time the fall began) but it was good news: strong demand was to produce revenues for its primary product upwards of $20 million for 2009. The only thing that caught my eye was ‘This represents growth of approximately 650% over 2008’. Sometimes huge gains like that can scare shareholders into selling. Considering POWR keeps posting really, really good news, like I said, a call to POWR investor relations or the transfer agent should clear up the mystery.

Here’s an example of the good news; Today, POWR announced a strong start to 2010 sales, with new business awards in late December and early January totaling approximately $35 million. This new business includes $15 million of contracts to install its smart grid Interactive Distributed Generation power systems at hospitals, data centers, retail sites, industrial facilities, and utilities, and $20 million of new business from major grocery and drug retailers for the Company’s EfficientLights LED lighting technology. Thus the substantial gain today. And on Jan 12, POWR said its distributed generation systems have been in daily operation to support utilities and businesses across the country with power during the cold snap that is gripping the nation. Since the cold snap began on Jan 1, PowerSecure has placed over 600 distributed generation systems into operation.

POWR posted a diluted EPS for Q3 2009 on Nov 5 of a positive $0.09 a 125% increase sequentially over Q3 09 and POWR’s gross margin as a percentage of revenue reached 37%, an all-time high for any quarter in the Company’s history. ‘Buy’.

POWR 1-Year                                                     POWR 3-Month

Gaining 4.77 this morning is ChinaCast Education Corporation (CAST) http://www.chinacastcomm.com/ currently trading in the $7.01 range. CAST is widely held by institutions with an average amount of short-sellers. CAST was at $3 in April and steadily rose to $8 in October. It has a current 3-Month floor of $6.50 with strong support at $7 and some support at $7.50. CAST has been dipping down and spiking up in the last 3-Months.

On Jan 4, CAST was upgraded to the NASDAQ Global Select Market tier, the highest category. The top-tier listing recognizes the highest financial listing standards in the world, with measures including earnings, liquidity and market value. “We are pleased to have met the elite qualifications for inclusion in the NASDAQ Global Select Market, which enhances the message to investors that ChinaCast conforms to the highest international financial compliance and corporate governance listing standards,” stated Ron Chan, Chairman and CEO of CAST. “We look forward to increasing our visibility in the capital markets, broadening our shareholder base and further building confidence among stakeholders as we continue to execute our strategic growth plan in the PRC for-profit education sector,” said Chan.

I believe CAST will settle down on its new exchange and will return to its $8 level, so- there’s still money to be made here. This too is a near-term ‘Buy’ consideration for me. I like the management. On 12-23, CAST’s Sr. Mgmt team agreed to purchase 692,520 shares of common stock through a private placement at $7.22 per share. That’s the stuff! CAST operates two schools in China and is a leading for-profit, post-secondary education and e-Learning services provider in China. The Company provides post-secondary degree and diploma programs through its two universities in China.

CAST 1-Year                                                     CAST 3-Month

Gaining 7.93% this morning is Ocean Power Technologies Inc., (OPTT) http://www.oceanpowertechnologies.com/ currently trading in the $7.49 range. OPTT has a 3-Month average daily trading volume of 303,008 shares. OPTT has a 52-week high of $11.22 set on 11-19-09. OPTT was at $7 in May, and then dropped to $4 in September. OPTT then shot up to the $9 range in September and managed to set a floor for two months at $9 before falling to its current $7 level. OPTT is a ‘Buy on the Dips’ near-term consideration for me.   

On Jan 18, the OPTT board promoted an insider to CEO. Charles Frederick Dunleavy had been the Company’s CFO since 2001 and the Company’s treasurer since 1990. I’d venture to say that Mr. Dunleavy knows what’s going on around OPTT. The former CEO resigned from the Company for personal reasons.

On 12-10, OPTT announced its Q2 results which included a decline in net loss to $7.3 million for the six months ended October 31, 2009 compared to a $10.0 million net loss for the six months ended October 31, 2008. Good.

OPTT makes wave power stations and PowerBuoy systems. OPTT has deals with the U.S. Navy, three leading Japanese companies including Mitsui Engineering and Shipbuilding and just signed a Memorandum of Understanding with the State of Oregon. The purpose of the MOU is to set forth an approach for developing wave power projects. Think of the energy possibilities. ‘Buy on the Dips’.   

OPTT 1-Year                                                   OPTT 3-Month

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