A Daylight Savings Stock?
|Written by GSCR Staff|
|Thursday, 30 October 2014 06:05|
Don’t forget to set your clocks back Saturday night as daylight savings time ends, in what our opinion, is turning into a ridiculous bi-annual routine with the majority of the year spent in DST anyway.
Why wouldn’t we want longer daylight at night during the cold winter months versus pitch black darkness at 5pm? But we digress…
Speaking of illumination, we spoke of using economic metrics in the Guide this week as a means to try and ‘see the light’ when it comes to stock picking. Coincidentally, just over year ago we featured Orion Energy Systems, Inc. (NYSE – OESX - $5.88) in the Market Monitor at $4.04 and gave a price target of $5.00 for one month. The stock soared to $7.95 in January and had a steady decline down to $3.94 in June. In May we told you to either take profits while the stock was still up 21% from our initial feature or hang on if you could take some more downturn. OESX is currently up 45% for the one year anniversary of our first feature.
The Company designs, manufactures and sells energy efficient lighting systems that are from a cutting edge portfolio of products encompassing LED Solid-State Lighting, high intensity fluorescent and smart controls. Orion has over 70 patents held or pending which provide unparalleled optical and thermal performance, drive financial, environmental, and work-space benefits for a wide variety of retrofit markets. One of the featured products is the Apollo Solar Light Pipe, a lens-based device that collects and focuses renewable daylight, bringing natural light indoors without consuming electricity.
So where are we the OESX? The deal flow continues to be very strong. Last week the Company struck a deal with the U.S. government for $2.1 million and $6.2 million with a major automotive dealer in September. Additionally, Orion continues to innovate with new modular LED and High Bay LED products.
One metric that convinces us that there are still many believers out there is the short float of 1.65%. Additionally, the stock is currently trading above the 200-day EMA.
We say that the OESX is the right play as investors look to put capital in alternative energy stocks while oil struggles. Continue to monitor quarterly financial results. Pops and drops will hinge on these results. The overall economy will have the biggest impact on future revenue. As we mentioned in the Guide, the metrics are certainly confusing. We say target $7.00 again as a profit taking level.
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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