Based in Latham, New York, Plug Power (NASDAQ:PLUG) is a well-known hydrogen fuel cell manufacturer. Moreover, PLUG stock is an affordable way to invest in the clean-energy revolution of the 2020s.
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However, it’s not always easy to hold onto Plug Power’s shares. Volatility is the norm for them, but that’s “par for the course” for the shares of firms with emerging technologies.
As we’ll see, PLUG stock recently touched the bottom of the range in which it has traded for a long time. That might sound bearish, as negative momentum in a stock can repel many investors.
However, many successful investors who utilize a “buy-low, sell-high” strategy accumulate shares when other people are selling them. Besides, Plug Power is making moves that could save the company millions of dollars while putting it at the forefront of the green-hydrogen market.
A Closer Look at PLUG Stock
Back in late 2020 and early 2021, some folks were calling PLUG stock a Reddit stock. That’s because they suspected that Reddit’s users were responsible for pushing the stock from $25 to $70.
The Reddit short-squeeze mob may have catalyzed the rally, but the shares weren’t destined to climb for very long. Disappointingly, Plug Power’s shares soon sank right back to $25 , and today the stock is trading very close to that price.
From a technical perspective, PLUG stock appears to have support at $20. That’s because the stock bounced off of that price point in May 2021 and then again in January 2022.
That $20 level could be a battle zone between the buyers and sellers for a while. If that level is broken, the next support will be $14, where the shares traded in October 2020.
Hopefully, PLUG stock won’t go down that far, but traders must be prepared for every possible scenario.
Succeeding by Growing
Strategic acquisitions can be a hallmark of a great business strategy. That’s because, for firms, acquiring companies that add value can be much more efficient than starting business segments from scratch.
When it comes to buying businesses, Plug Power tends to think outside the box. For instance, in December 2021 the company acquired Frames Group, which specializes in turnkey systems integration for the energy sector.
That acquisition helped Plug Power expand its global presence by adding Frame’s employees in the Netherlands, India, the United Emirates, Malaysia and Brazil to Plug’s team.
More recently, Plug Power finalized its acquisition of a process solution and engineered-equipment provider known as Joule Processing. Deploying Joule’s cryogenic process technology may, according to Plug Power, potentially reduce the amount that Plug pays to obtain liquified hydrogen by 25%.
Joule’s technology will, furthermore, “represent a capital expenditure savings of approximately $200 million for Plug Power over the next four years by bringing hydrogen liquefaction capabilities in house.”
A Total End-to-End Solution
Speaking of saving money, Plug Power points out that liquifying hydrogen makes the fuel easier to transport, thereby providing cost savings as well as allowing the company to sell the fuel over a larger geographic area.
Thus, Plug Power’s decision to partner with two companies that develop hydrogen liquefaction plants is quite logical.
Those two companies are Atlas Copco Mafi-Trench Company LLC, a unit of Atlas Copco (OTCMKTS:ATLKY), which develops turboexpander technology, and Fives, which specializes in brazed heat exchangers and cryogenic cold boxes.
These companies seek to improve the efficiency, cost and lead time of hydrogen liquefiers. Plug Power Chief Strategy Officer Sanjay Shrestha emphasized that the alliance will help his company achieve its ambitious clean-energy mission.
“Atlas Copco Gas and Process and Fives bring core expertise that complements Plug Power’s capabilities and vision to be a total end-to-end solution for the green hydrogen economy,” Shrestha explained.
The Bottom Line
PLUG stock won’t have a quick or easy path back to $70, and investors should prepare for the stock to be volatile.
That being said, it would be hard to resist buying Plug Power’s shares for $20 or less, if they reach that price. Clearly, the company is in growth mode and is fully prepared to delve into high-potential green-energy niche markets.
It would be premature to give up on PLUG stock now. The clean-hydrogen market’s expansion is practically inevitable, and Plug Power should maintain its leadership position in the sector for a long time to come.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
