This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Do fuel cell stocks have much energy left?

Chris Lau, Kapitall: Will the growth of alternative energy investments spill over to fuel cell stocks?

Fuel cell stocks tear upwards whenever a deal is announced or an acquisition takes place. Others in this sector are less fortunate. Wild volatility greets companies like Ballard Power Systems (BLDP). As long as the positive momentum for the sector continues, it’s anyone’s guess as to when valuations lead these stocks downward.

Plug Power makes acquisition

Plug Power (PLUG) acquired ReliOn, paying for the acquisition entirely in stocks. Plug will pay around $4 million for the hydrogen fuel cell stack technology company. Plug is interested in ReliOn because the latter’s solutions are sold to AT&T (T), Verizon (VZ), and Sprint (S).

Read more from Kapitall: Could a Hillary-run benefit the biggest corporate Clinton donors?

The deal diversifies Plug’s fuel cell solutions into distributive backup power. Investors clearly liked the deal, because shares traded well above the $6 lows reached in March, 2014. However, there is still upside, as the stock is also trading below its 52-week high.

Plug shares are valued at a price-to-sales ratio (PE) of around 42 and a price-to-book ration (PB) of over 200. Conversely, Ballard Power is valued at a PE of 7.81 and a PB of 7.46.


There is a growth market for alternative energy. If applying hydrogen Fuel Cell solutions in delivery trucks costs less than say, diesel fueled solutions, and then demand for fuel cells will increase. For now, projects implementing this technology will need to weigh the risks associated with trucks having a lower range of travel. If the scalability of fuel cells is there, then the lofty valuation in companies like Plug Power would be justified. Bears appear to disagree: short float for these companies is above 10 percent.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs