Plug Power (PLUG) Stock Jumps on Fuel Cell Orders

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Shares of Plug Power Inc (PLUG) are up significantly today, surging as much as 12% on heavy volume. PLUG stock is piggybacking on last Friday’s big gains, when shares added nearly 5%.

plug power inc plug stock fuel cell energy incThe value of companies like FuelCell Energy Inc (FCEL) and Ballard Power Systems Inc. (USA) (BLDP) also soared today on euphoria surrounding the fuel cell industry.

What’s Behind Plug Power Stock’s Move Today?

At its midday peak on Monday, PLUG stock had rallied more than 22% in the last five trading sessions alone. The rally comes after the company’s announcement last week that Golden State Foods had ordered GenDrive fuel cells for nearly 40 “handling vehicles” like forklifts and pallet trucks.

Golden State Foods — a food manufacturer and distributor with clients like Starbucks (SBUX), Yum Brands‘ (YUM) Taco Bell, and other household names — lends credibility to Plug Power and its commercial fuel cell technology.

Wall Street is intimately familiar with PLUG stock already — in fact, it has a serious love/hate relationship with the company. Within the last year, investors have sent shares from lows of 45 cents to highs of $11.72 in a span of about four months, only to send shares below the $4 level a few months later.

It didn’t hurt the bullish case for Plug Power when fuel cell power plant operator FuelCell Energy announced an extended partnership with the State of Connecticut last Wednesday. The state will financially support a two-stage expansion project for a manufacturing facility in Torrington, Connecticut, according to the statement:

“The State of Connecticut has extended a financial package through the Department of Economic and Community Development for both stages, including $20 million of low interest long-term loans and up to $10 million of tax credits, predicated on certain terms and conditions, including the forgiveness of 50 percent of the loan principal if certain job retention and job creation targets are reached.”

Pretty juicy terms, eh? I don’t blame FCEL stock holders for sending shares skyward. FCEL stock was up as much as 12% today and has soared more than 56% in 2014.

As for Ballad Power Systems, BLDP stock is merely catching a ride on the rising tide of PLUG and FCEL. The Canada-based company does make the fuel cell stacks that go in Plug Power’s fuel cells, so it’s reasonable that there should be some correlation between BLDP and PLUG.

For better or for worse, these three stocks are strongly correlated and have a tendency to move together. Now, if only they could start making money. Not one of them has recorded a full-year profit in the last five years.

As of this writing John Divine held no positions in any of the stocks mentioned. You can follow him on Twitter at @divinebizkid.


Article printed from InvestorPlace Media, https://investorplace.com/2014/11/plug-power-inc-plug-stock-fuel-cell-energy-inc/.

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