Carbon-Capture Deal Extension Should Put FuelCell Energy in Motion

Among the most popular names on Wall Street in the hydrogen fuel cell market is FuelCell Energy (NASDAQ:FCEL). Over the years, many traders with a tolerance for big price moves have tried their luck with FCEL stock.

a picture of a fuel cell

Source: Kaca Skokanova/Shutterstock

Yet, FuelCell’s bright future as a business isn’t just dependent on luck. Ultimately, it’s all about the national and global shift toward sustainable practices and carbon neutrality.

As governments pass clean energy friendly policies, FCEL stock holders could enjoy significant returns. This is a long-term outlook, however, and there will likely be volatility along the way.

Still, it’s much easier to envision the potential upside as the U.S. recently took a huge step forward in implementing Earth-friendly policy. Moreover, FuelCell’s tie-in with an energy-market giant just got stronger, and will last longer.

FCEL Stock at a Glance

Without a doubt, FCEL stock traders would like to rewind the clock so they could revisit the stock’s early-2021 move from $10 to nearly $30.

Those were good times, but they’re in the rear-view mirror now. Sensible investors must deal with the price action of today, challenging as it may be.

There does appear to be support at the $6 level, as the buyers have held that level on multiple occasions. However, you don’t have to wait for FCEL stock to decline to $6, as this might not happen anytime soon, or at all.

Really, it’s a matter of picking your buy price and sticking to it. If your time horizon is long enough, then $8 or $9 could actually be a reasonable buy price. And if you’re not accustomed to daily price moves of 5% or more, you’d better find a seat belt and strap in tightly.

Whatever you choose to do, please maintain a very moderate position size. The open secret of surviving high-volatility investments is to only own a few shares. Meanwhile, you can keep plenty of dry powder ready for future opportunities.

A Historic Occasion

2021 could be the most significant year in recent memory, in terms of progress in getting pro-sustainability legislation on the books in the U.S. In Connecticut, for instance, FuelCell applauded as Governor Ned Lamont signed Connecticut House Bill 6524.

This bill’s full title is “An Act Concerning the Solicitation of New Fuel Cell Electricity Generation Projects.” Now, that’s clearly a win for FuelCell Energy and environmental, social and governance (ESG) stocks more broadly.

In a similar vein, Governor Gavin Newsom recently signed California’s Senate Bill 155. This bill includes a two-year extension of the Fuel Cell Net Energy Metering program, also referred to as Fuel Cell NEM.

Yet, these events pale in comparison to the long-awaited $1 trillion infrastructure bill which U.S. President Joseph Biden just signed into law.

Along with a number of other items, the bill includes:

  • $73 billion for the electricity grid to include upgrades to U.S. power systems, which will help the grid carry renewable energy, among other things

  • $47 billion for climate resiliency — not directly related to fuel cells necessarily, but still relevant to the clean-energy movement

  • $21 billion for environmental projects, primarily related to cleaning up pollution/waste

  • $7.5 billion for electric vehicles — here’s where the rubber meets the road. This allocation includes increasing the availability of charging stations across the U.S., in advancement of Biden’s pledge to build 500,000 stations nationwide.

Capturing the Moment

In case all of this pro-clean-energy legislation isn’t enough to convince you, there’s also positive news directly related to FuelCell Energy. In particular, the company is extending its its joint-development agreement with Exxon Mobil (NYSE:XOM) for carbon-capture technology.

With this six-month extension, FuelCell and ExxonMobil continue to work closely together to promote carbonate fuel-cell innovation. The stated objective of this technology will be to capture carbon dioxide from industrial facilities and power generation. And so, the arrangement between the two companies is set to continue until April 30, 2022.

FuelCell Energy President and CEO Jason Few applauded the opportunity to develop technology “that is targeted to tackle one of the largest environmental challenges of today.”

That challenge is carbon dioxide emissions from power generation and industrial exhaust streams. With Exxon Mobil as its partner, FuelCell Energy is poised to innovate a unique carbon-capture solution, and made the world a cleaner place.

The Takeaway for FCEL Stock

FCEL stock is far from its peak price. That, however, isn’t necessarily a bad thing.

Recently passed pro-clean-energy U.S. legislation could buoy the FuelCell share price in the coming months and years. Plus, an extended partnership with Exxon Mobil sets FuelCell apart from its competitors.

So, feel free to set your buy-in price for FCEL stock. Then, wait patiently. If your outlook is positive for the company and its innovative technology, then a long-term position could serve you well with FuelCell Energy.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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