Cramer got it wrong on Capstone (CPST)

[insidemadmoney]

Check out news, commentary, and analysis at http://www.insidemadmoney.com - an inside look at Cramer's Mad Money.

Cramer’s recent recommendation on Capstone Turbine (CPST) because of a purported deal with Wal-Mart (WMT) has produced a flurry of activity, sending the stock up over 30% at its high after his recommendation. His recommendation, however, has produced a backlash among some in the financial community.

Herb Greenberg’s Reality Check column entitled “Countering Cramer on Capstone” has these key points (subscription required):

* A Wal-Mart spokesman said Wal-Mart did not purchase anything directly from Capstone
* Wal-Mart bought a power generation system from UTC Power, with the system containing 6 Capstone microturbines.
* No decision has been made to expand this project to other Wal-Mart stores

The Motley Fool also published a bearish article, “Dog of the Day” on Capstone Turbine and another one here, “Some Missing Info About Capstone.”

There is strong evidence for taking a bearish position on Capstone Turbine - Cramer may, in this case, given advice based on unsupported data.

Check out news, commentary, and analysis at http://www.insidemadmoney.com - an inside look at Cramer's Mad Money.

[aj14]

Stock is hard to borrow, which might mean shorts are already loaded up waiting for the bottom to fall out. Bottom line with any of these alternative energy stocks: the little guys don't stand a chance; if a product is worth doing in commercial quantities, a company like GE (the world wide leader in wind power) could start banging out units by the kazillions. There's a reason they don't do it now...not profitable! Stay away from CPST; it is a sick stock.

[Prodigy]

Word aj, nuff said...

CPST is garbage...

Peace.

[xboilermaker]

Sorry you bought after Cramers first pump, aj. Looks like folks were more wary this time around. I hope the brief spike made The Chart Guru some money, and he took advantage and got out quickly.

[deepinwonder]

There was discussion about Capstone on Cramer's radio show, today, he interviewed that analyst who recommends stocks under $10. You can read the re-cap or listen to the whole show on thestreet.com.

[Kevin Wong]

I bought in shortly after Cramer's first recommendation. I've been in since the fall and am finally in the seeing a small profit. I was a little annoyed to see a small sell-off today...unless I read the chart wrong. Anyone else still in?