I wrote prior articles on Capstone Turbine Corporation (CPST) here and here. Recently on 15 November 2005, Jim Cramer on his show Mad Money commented favorably on Capstone. The stock rocketed up $1.13 to $4.29 for an about 36% gain on the day. Since that time, the stock has continued to soften. On Friday, 2 December 2005, the stock closed at $3.35, down about 22% from after Cramer had recommended the stock.
I do not have any strong opinions about Capstone one way or the other. I hope that the company does do well, and that these prices present a bargain to investors. However, the point that I wanted to make is that investors should be cautious when getting involved with a small company that has just made a large move up on a well known commentator's comments. Another point is to do your own homework so that you fully understand your investment.
I like Jim Cramer and I think he has been and continues to be a strong positive influence for investors. That said, you should still do your own homework and not rely on a quick snippet of information to base your investment decisions.
I have no positions in Capstone whatsoever.
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