With the world going green, keep an eye on hydrogen stocks.
Over the last few days, the Biden Administration announced new guidelines on hydrogen tax credits. According to The Verge:
“The tax credit, called 45V, can save companies up to $3 per kilogram of production if they can meet the tough new standards proposed. They’ll have to purchase clean electricity from new generators that only started operating within three years of the hydrogen production facility coming online. This is meant to ensure that hydrogen production helps add new sources of clean energy to power grids rather than sucking that resource dry.”
Unfortunately, it’s already being seen as too restrictive.
However, companies, like Plug Power (NASDAQ:PLUG) do expect for the restrictions to be loosened. In fact, according to company CEO Andy Marsh, “We do expect the regulations to loosen up. I’ve talked to many senators who tell me it will get easier — not harder,” as quoted by Bloomberg.
That being said, investors may want to start loading up on hydrogen stocks, such as:
Plug Power (PLUG)
Plug Power has seen better days. But don’t write it off just yet. After falling from about $13 to less than $3.50, it’s showing signs of life again. Last trading at $4.79, I’d like to see PLUG initially refill its bearish gap around $6, and potentially run back to $8 shortly. Especially, if the Biden Administration tax credit rules are loosened a bit.
Helping, the company is targeting daily hydrogen production of 2,500 tons by 2030, as noted by Motley Fool contributor Scott Levine. In addition, PLUG expects to see 2030 revenue of about $20 million, which would represent about 52% compound annual growth. PLUG also sees margins improving to about 35% at the time.
Air Products and Chemicals (APD)
I’ve mentioned Air Products and Chemicals (NYSE:APD) quite a few times in 2023.
For example, on Dec. 26, I noted, “I mentioned Air Products and Chemicals on December 5, as it traded at $265. Today, it’s up to $272.84. From here, I’d like to see it initially refill its bearish gap around $295. As we wait for the recovery, we can collect its yield of 2.59%.” Since then, APD ran to $273.80. From here, I’d like to see it test $300 shortly.
Insiders like the stock here, too. In November, for example, Chairman and CEO, Seifi Ghasemi bought about 21,000 shares for just over $5.4 million. Technically, after finding strong support at $260, APD recently ran back to $273.80. From here, I’d like to see the stock refill its bearish gap around $290 a share near term.
Global X Hydrogen ETF (HYDR)
Or, we can look at an ETF such as the Global X Hydrogen ETF (NASDAQ:HYDR) for diversification at a low cost of about $7 at the moment.
With an expense ratio of 0.5%, the ETF offers solid diversification with key hydrogen stocks for less than $7 a share. At the moment, the ETF invests in stocks involved with hydrogen production, and the development and manufacturing of hydrogen fuel cells.
Some of its top holdings include Bloom Energy (NYSE:BE), Plug Power, Ballard Power (NASDAQ:BLDP), and Ceres Power (OTCMKTS:CPWHF). While its chart is nothing to write home about, give it time. After finding strong support around $5.86, it’s slowly starting to recover. Last trading at $6.91, I’d like to see HYDR retest $8 initially.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
