Why Ocean Power Technologies (OPTT) Is Spiking Today

NEW YORK (TheStreet) -- Ocean Power Technologies (OPTT) was spiking 61.8% to $3.72 on Tuesday following a new energy project partnership with Lockheed Martin (LMT).

Shares of Lockheed Martin were gaining 0.9% to $155.32.

The $205.68 million deal will use power buoys designed by Ocean Power Technologies to harness energy from the movement of the waves off the coast of Victoria, Australia.

When the project is completed, Lockheed said it will generate 62.5 megawatts at peak power, or enough power for 10,000 homes.

"Ocean energy is a tremendously large, untapped resource which has global applicability," said Tim Fuhr, director of ocean energy for Lockheed, in a statement. "You can pretty much get ocean energy on coastlines around the world. It's essentially clean and the fuel is free."

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TheStreet Ratings team rates OCEAN POWER TECHNOLOGIES INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate OCEAN POWER TECHNOLOGIES INC (OPTT) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 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.
  • Net operating cash flow has decreased to -$3.41 million or 16.37% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, OCEAN POWER TECHNOLOGIES INC has marginally lower results.
  • The gross profit margin for OCEAN POWER TECHNOLOGIES INC is rather low; currently it is at 23.92%. Regardless of OPTT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, OPTT's net profit margin of -704.95% significantly underperformed when compared to the industry average.
  • In its most recent trading session, OPTT has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • OPTT, with its very weak revenue results, has greatly underperformed against the industry average of 7.4%. Since the same quarter one year prior, revenues plummeted by 65.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • You can view the full analysis from the report here: OPTT Ratings Report


TheStreet Ratings team rates LOCKHEED MARTIN CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate LOCKHEED MARTIN CORP (LMT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, LMT's share price has jumped by 73.21%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LMT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has significantly increased by 171.33% to $938.00 million when compared to the same quarter last year. In addition, LOCKHEED MARTIN CORP has also vastly surpassed the industry average cash flow growth rate of -9.27%.
  • LOCKHEED MARTIN CORP's earnings per share declined by 13.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LOCKHEED MARTIN CORP increased its bottom line by earning $9.04 versus $8.34 in the prior year. This year, the market expects an improvement in earnings ($10.55 versus $9.04).
  • LMT, with its decline in revenue, underperformed when compared the industry average of 7.7%. Since the same quarter one year prior, revenues slightly dropped by 4.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Aerospace & Defense industry and the overall market, LOCKHEED MARTIN CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: LMT Ratings Report

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