I still believe that Plug Power (NASDAQ:PLUG) stock will likely eventually rise tremendously, driven largely by its vehicles for warehouses. Moreover, I think that the company’s new hydrogen truck business, unveiled earlier this month, can also lift PLUG stock over the long-term.
But with most investors very worried about the coronavirus from China and selling high-flying growth stocks, now is not the time to buy the shares. In fact, I would advise anyone who already owns the stock to sell it and buy it back later, at a lower price, when fears about the coronavirus have subsided.
I took my profits on Plug Power’s shares and intend to buy them back in two or three weeks when I think concerns about the virus will have subsided.
Plug Power’s New Truck Business Has Tremendous Potential
On Feb. 20, Plug Power announced that it was partnering with Colorado-based Lightning Systems to develop fuel cell-powered trucks capable of traveling 200-400 miles.
There’s a great deal of evidence to suggest that the demand for such trucks will be meaningful. As everyone knows, many businesses and governments are looking to reduce the use of gasoline in order to lower pollution and combat global warming. Further, electric vehicles are seen as a key means of accomplishing that goal.
But when it comes to large trucks, battery-powered electric vehicles are not a good solution. That’s because battery-powered electric trucks require a great deal of electricity (according to one estimate, charging the battery one of Tesla’s (NASDAQ:TSLA) Semi SUVs “would consume as much energy per year as 2,500 EU households”) and require huge batteries to travel just 250 miles.
Fuel cell-powered trucks can travel a much longer distance than battery-powered trucks with a power source of the same weight.
In 2018, Anheuser Busch (NYSE:BUD) bought 800 fuel-cell-powered trucks from start-up Nikola, and Toyota (NYSE:TM) and Paccar (NASDAQ:PCAR), which owns Kenworth trucks are building ten fuel cell trucks that will be used at two California ports.
As I’ve written in the past, vehicles powered by hydrogen fuel cells are also more likely to be able to function during storms and other emergencies because, unlike battery-powered electric vehicles, fuel cell-powered vehicles can be charged quickly and are not at all dependent on electricity from the grid.
Further, unlike gasoline, hydrogen can easily be produced locally and, thus, stored in areas that are close to the businesses that use it. So in many emergency situations in which gasoline could not be acquired, hydrogen could be easily obtained.
The Bottom Line on PLUG Stock
Plug Power’s move into fuel cell-powered trucks will likely improve the company’s results in the long-run, and I am still very upbeat on the stock’s long-term outlook. But with the shares plunging amid worries about the coronavirus, they should be sold now and bought back in a couple of weeks, at a lower price, when fears about coronavirus likely will have subsided.
Larry Ramer has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks and Snap. You can reach him on StockTwits at @larryramer. As of this writing, he did not own any shares of the aforementioned companies.