It’s been a long time coming, but alternative energy stocks are finally breaking out of their multi-year funk. Many of the problems for solar, wind, hydrogen and other alternative energy penny stocks started when the overall markets slumped years ago.
Let’s take a quick look back…
The headwinds for alternative energy investors have been multi-faceted. For starters, many of these industries failed to show neither profitability without subsidy, nor a full-fledged buy in by governments, business, and consumers.
Then there was the oversupply issue that simply cratered the solar industry. China started selling solar components to US companies below cost just to gain market share. The problem was, US solar manufacturing companies couldn’t do the same and these stocks crashed hard- dragging all alternative energy stocks down with them.
In the end, alternative energy stocks were abandoned for dead- at least until some consolidation and/or potential for profit returned.
Welcome to 2013, and the return of the alternative energy stock.
One of the greatest comebacks of the year had to be JinkoSolar- JKS.
With some support by the Chinese government, and actual improvements in profitability (not to mention some short covering)… JKS has risen from a 52-week low of below $4.00, to trade just under $35 a share at one point this year. That’s nearly a 775% gain in under a year!
Obviously JKS is no longer truly a penny stock and not something I’d be recommending you buy. However, I’ve found another alternative energy penny stock that has just started to break out- and I think it has a long way to go yet!
PLUG – Plug Power
Plug Power is an alternative energy technology company that designs, develops, and manufactures fuel cell systems for industrial off-road markets (think forklift or other material handing vehicles). Plug Power primarily builds and sells a hydrogen-fueled Proton Exchange Membrane (PEM) GenDrive product.
PLUG’s client list includes:
- Whole Foods
- Mercedes Benz
- Lowe’s Home Improvement
- Ace Hardware
And that’s just some of the names you know…
The point here is that PLUG has a real product they sell to very real clients. So why then is this company trading at under $2?
Remember, earlier I told you the whole alternative energy investment thesis was dead over the past 5 years. And any alternative energy company must now prove it’s near profitability to even be considered worthy. Simply having cutting-edge technology just isn’t good enough any longer.
Well PLUG has done just that.
The company updated revenue guidance to reflect recent orders by some of their larger clients. These clients are expected to sign in the company’s fourth-quarter ended December which will generate $30 million to $40 million in revenue. And this will create a recurring revenue stream over a multi-year agreement.
The upside here is compelling. Given PLUG’s best-in-class product and continued growth we’re seeing in the global economy, there’s a good chance we’ll continue to see press releases in which PLUG is renewing contracts and generating new orders.
And at just $1.73 per share, it’s fair to say PLUG looks undervalued!
Keeping you one step ahead,