There's news this morning on two positions -- Capstone Turbine (CPST) and Vasco Data Security VDSI -- and while we aren't trading on either report, we wanted to share our views.
Capstone Turbine said this morning that the recently passed Federal Energy Bill will provide significant economic benefits for businesses that invest in clean, microturbine-based power, and shares were recently trading 17% higher to $3.10.
This shouldn't come as a surprise to readers of this newsletter, as we said the same thing when we initiated our position on Aug. 3. More specifically, the energy bill contains a 10% tax incentive for businesses to buy and conserve energy with microturbine generators like the ones Capstone sells.
Capstone remains under the radar of most investors, but this morning's news should help the company garner more attention. We have a 28% gain at the current quote, but we are standing pat given our three-to-12-month bullish outlook for the stock. We expect a solid earnings report from Capstone on Wednesday, and will provide readers with a further update following the company's conference call.
Shares of Vasco Data Security are trading 1.9% higher to $11.11 this morning following a bullish research note from Wedbush Morgan, which released the results of a U.K.-based survey that was designed to gauge consumer views of online banking security.
Some 61% of consumers said they were unconcerned about the risk of online banking security, and 50% would not switch banks for better protection. We view this as a positive for the sector because with risk awareness still low, increased news coverage of online fraud will likely have a bigger impact on Vasco's business and, ultimately, its share price. Wedbush also said that Vasco might have some problems with pricing power, but should benefit from strong market demand for its authentication solutions.
Vasco's superior growth metric, as laid out in our initiation piece on July 22, makes the stock attractive for purchase at the current quote. We believe the company will leverage its partnership with VeriSign (VRSN) to gain further exposure, leading to increased sales in the coming quarters.
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