Ballard Power Systems (BLDP) In A Perilous Reversal

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Ballard Power Systems ( BLDP) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Ballard Power Systems as such a stock due to the following factors:

  • BLDP has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $15.0 million.
  • BLDP has traded 1.8 million shares today.
  • BLDP is down 4.1% today.
  • BLDP was up 19% yesterday.

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More details on BLDP:

Ballard Power Systems Inc. is engaged in the development and commercialization of proton exchange membrane fuel cells worldwide. Currently there are no analysts that rate Ballard Power Systems a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Ballard Power Systems has been 11.2 million shares per day over the past 30 days. Ballard Power Systems has a market cap of $429.3 million and is part of the industrial goods sector and industrial industry. Shares are up 156.1% year-to-date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Ballard Power Systems as a sell. Among the areas we feel are negative, one of the most important has been poor profit margins.

Highlights from the ratings report include:
  • The gross profit margin for BALLARD POWER SYSTEMS INC is currently lower than what is desirable, coming in at 25.23%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -25.16% is significantly below that of the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electrical Equipment industry and the overall market, BALLARD POWER SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • BLDP's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, BLDP has a quick ratio of 2.34, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has slightly increased to -$6.64 million or 5.14% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.57%.
  • This stock has increased by 182.75% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in BLDP do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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