A Quantum Opportunity

In Monday’s Goldman Guide we mentioned that auto, oil, and healthcare stocks might be movers in this market.  Our biotech stock pick TherapeuticsMD (NYSE – TXLD) has had a nice start up over 4% already since Tuesday.

Let us shift gears, pardon the pun, to the automotive industry.  Tesla Motors (NASDAQ – TSLA - $253.00) is leading the charge this year as an automotive and technology play up nearly 70% YTD.  Automotive and related industries remain strong both in consumer sales and in the market for the most part. We would like to think that Quantum Fuel Systems Technologies Worldwide, Inc. (NASDAQ – QTWW - $8.30) presents the opportunity for investors to get in on the next TSLA at the Tier I automotive supplier level. 

The Company has a variety of products targeted at growing sectors in the automotive industry.  First, its CNG (compressed natural gas) products are used in storage and fuel systems for heavy, medium, and light-duty trucks and passenger vehicles that utilize the growing natural gas fuel market.  Second, the Company also provides powertrain engineering, electronic control, software strategies, and system integration for hybrid and plug-in hybrid electric vehicles (PHEV).  Finally, Quantum Fuel Systems designs, develops, and manufactures advanced lightweight composite tanks and complete fuel systems for hydrogen fuel cell electric vehicle (FCEV) applications which are used in electric and other alternative engines.  These products used in automotive original equipment manufacturers, fleets, aerospace industry, military and other governmental agencies.

Our micro analysis of the stock gives a solid buy picture.  First, the technical analysis Daily Moving Average is very bullish all the way out 50 days.  Second, QTWW is in the midst of an accumulation phase over the past three months, rising over 22% in price level on nearly 700,000 shares traded per day.

QTWW is a both a solid short term play on the general capital influx into the automotive sector combined with a long term investment on new automotive technology.  Look for at least a 25% pop over the next three to four months.

Have a great day!

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

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