Ocean Power Technologies Inc OPTT 2.56% shares are up more than 400 percent from their May lows as the company has secured a pair of new contracts.
The wave power technology company’s market cap has risen by about $20 million in the past six months. However, a look at the contract numbers reveals that they are relatively modest in size.
The company completed its first commercial PB3 agreement with Mitsui Engineering and Shipbuilding worth about $975,000. In addition, Ocean Power secured a new contract with the U.S. Department of Defense Office of Naval Research worth $250,000.
Together, those two new contracts are worth just over $1.2 million, a far cry from the $20 million in market cap Ocean Power has added this year.
What’s going on?
The most likely explanation is that the value of the new contracts doesn’t mean as much to investors as the fact that the company’s PB3 product is drawing commercial interest. The Navy and Mitsui clearly see enough potential in PB3 technology to take a gamble on Ocean Power, and that vote of confidence is enough for speculative investors to take a gamble as well.
In other words, it’s not the value of Ocean Power’s recent contracts that is moving…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
