BLDP7 May 2014 15:02
Article on BLDP, touches on the fundamentals for this sector, worth a read:
Ballard Power Systems' Drop Is A Buying Opportunity You Shouldn't Miss
May. 6, 2014 3:02 PM ET | 17 comments | About: BLDP, Includes: PLUG
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
Summary
Ballard shares dropped after first-quarter results, opening up an opportunity for investors to buy more shares.
Ballard counts Plug Power as a key customer, and this could be a could driver since Plug Power has entered into a deal with Wal-Mart.
Ballard is deploying its systems across the globe as fuel cells gain more adoption.
Ballard's earnings are expected to grow at a terrific pace, and its financial position looks good, making it a prime long-term investment at this juncture.
Fuel cell player Ballard Power Systems (BLDP) took a beating on the stock market after its first-quarter earnings report and accompanying outlook disappointed Wall Street. Ballard shares dropped more than 10% after the company's revenue of $14 million missed analysts' estimates of $17.52 million. However, all was not bad for Ballard in the quarter as it managed to narrow its net loss and reaffirmed the guidance. In addition, the company's partnership with fellow fuel cell player Plug Power (PLUG) is expected to be a long-term catalyst.
Considering the prospects in the fuel cell industry and Ballard's terrific growth expectations, investors should consider capitalizing on the stock's recent drop. Let's see why.
Improvements worth noting
Ballard saw growth in its business in the previous quarter, resulting in a 13% year over year jump in quarterly revenue. In addition, it achieved a 23% reduction in cash operating costs and a 60% improvement in adjusted EBITDA. The company's bottom line performance was better than consensus estimates, and it expects to put in a better performance as the year progresses. Ballard expects to generate 60% of its full year revenue in the second half of 2014, so investors shouldn't count the company out yet.
Ballard's restructuring strategy has been a key driver as it pushes toward profitability. It has transformed itself from a fuel cell car research and development company into a customer-focused fuel cell company. The company has entered into strategic alliances with Volkswagen (OTCQX:VLKAY) and Anglo American Platinum in a move to grow its market going forward.
In 2014, the company is focused on improving its profitability. Ballard is aggressively cutting costs and has recorded a 60% drop in product costs since 2009. The company is expecting this momentum to continue in 2014 as well, and is counting on three catalysts to drive its performance -- power system sales, material handling stack sales, and engineering services.
Plans ahead
This year, Ballard has trained its sights on aggressively penetrating regions such as Japan, Indonesia, and Philippines. Ba
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