This Old ‘Dog’ Getting Off the Porch

Written by GSCR Staff   
Friday, 18 July 2014 08:49

The dog days of summer are definitely starting to set in despite the cooler than usual temperatures in the East this week.

With the World Cup over, there is definitely a sports void between now and the start of football. It is time to look at an old ‘dog’ that seems to be getting some momentum.

 

One of our Market Monitor picks from earlier this year was Quantum Fuel Systems Technology Systems Worldwide, Inc. (NASDAQ - QTWW - $5.11). We featured the stock in late February at a price of $8.30. For those doing math, that is nearly a 39% drop in price. Bow wow!

 

We think QTWW hit a bottom of $3.04 in early May and is on the rebound led by some fabulous deal flow with major OEM including Kenworth Trucks, Dillon Transport, and Westport Innovations, Inc. (NASDAQ – WPRT) over the last month or so.

 

The average daily trading volume has been over 1 million shares since the start of this rebound over the past 2 or 3 months, which is a great momentum indicator. Additionally, QTWW was added to the Russell Microcap® Index earlier this month. We have mentioned this is a big plus in the past, as being on this index will, by default, produce some more institutional buying.

 

Do we think this old ‘dog’ is going to win the annual Kennel Club show and bounce up to $10 in a month? The answer is no. However, QTWW is a solid inexpensive play on the new automotive technology sector. It may take a while, but we think we get back to even in mid 4Q14 and get into the green in a big year in 2015.

 

Have a great weekend!

 

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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