Trade-Ideas LLC identified

Ocean Power Technologies

(

OPTT

) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ocean Power Technologies as such a stock due to the following factors:

  • OPTT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $12.4 million.
  • OPTT has traded 183,305 shares today.
  • OPTT is down 7% today.
  • OPTT was up 294.8% yesterday.

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More details on OPTT:

Ocean Power Technologies, Inc. develops and commercializes proprietary systems that generate electricity by harnessing the renewable energy of ocean waves primarily in the United States, Europe, Asia, and Australia. Currently there are no analysts that rate Ocean Power Technologies a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Ocean Power Technologies has been 23,700 shares per day over the past 30 days. Ocean has a market cap of $3.0 million and is part of the industrial goods sector and industrial industry. The stock has a beta of 2.86 and a short float of 2.9% with 0.03 days to cover. Shares are down 27.1% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Ocean Power Technologies as a

sell

. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Electrical Equipment industry and the overall market, OCEAN POWER TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • OPTT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 81.92%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • OPTT, with its very weak revenue results, has greatly underperformed against the industry average of 10.5%. Since the same quarter one year prior, revenues plummeted by 98.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has significantly increased by 58.68% to -$1.09 million when compared to the same quarter last year. Despite an increase in cash flow, OCEAN POWER TECHNOLOGIES INC's cash flow growth rate is still lower than the industry average growth rate of 87.16%.
  • OCEAN POWER TECHNOLOGIES INC has improved earnings per share by 12.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, OCEAN POWER TECHNOLOGIES INC continued to lose money by earning -$7.50 versus -$9.40 in the prior year.

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