Ormat: Geothermal Breakout?

09/14/2016 8:00 am EST


Leo Fasciocco

Investment Columnist and Publisher, Ticker Tape Digest

Our latest featured breakout stock engages in the geothermal and recovered energy power business worldwide; the stock recently hit a 7-year high, explains Leo Fasciocco, editor Ticker Tape Digest

With annual revenues of $645 million, Ormat Technologies (ORA) builds and operates geothermal and recovered energy-based power plants and sells electricity.

The product unit makes equipment for geothermal and recovered energy-based electricity generation. It includes fossil fuel powered turbo-generators and heavy duty direct-current generators.

ORA also provides services relating to the engineering, procurement, construction, operation, and maintenance of geothermal and recovered energy-based power plants.

This year, analysts are forecasting a strong 36% jump in net to $2 a share from $1.47 a year ago. The stock sells with a price-to-earnings ratio of 25.

The largest fund buyer recently was the American Century Utilities Investor Fund which purchased 228,269 shares as a new position.

ORA's 12-month performance shows the stock appreciating 47% versus a 12% gain for the stock market.

Technically, the stock has had a breakout from a six-week flat base. The stock's momentum indicator is strongly bullish and the accumulation-distribution line compliments the price action.

We see ORA as more of a trading play due to an expected slowdown in earning growth next year. We are targeting the stock for a move to $60 off of the recent breakout. A protective stop can be placed bear $48.

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By Leo Fasciocco, Editor of Ticker Tape Digest

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