The price action and euphoria towards battery-powered carmaker Tesla Motors, Inc. (NASDAQ/TSLA) clearly shows the demand for innovative companies that deliver a great story, as my stock analysis suggests.
Investors want to see less demand for energy produced by fossil fuels and more demand for the green energy movement, whether its wind, water, solar, or another form of green energy, according to my stock analysis.
A small company that I have been following for a while in the alternative energy space is FuelCell Energy, Inc. (NASDAQ/FCEL), which has a market cap of $421 million.
My stock analysis indicates that the company is very innovative, which is what we want to see in high-potential stocks.
Chart courtesy of www.StockCharts.com
FuelCell provides alternative fuel cell solutions via its stationary “Direct FuelCell” power plants that are built to deliver ultra-clean, efficient, and reliable green power. The process involves harnessing the use of renewable biogas from wastewater treatment and food processing.
As my stock analysis indicates, the company’s clients include commercial, industrial, government, and utility companies. Sectors served include the food and beverage, manufacturing, hospital and prison, college and university, hospitality, utilities, and wastewater treatment areas.
According to the company, the energy produced is up to two times as efficient as fossil fuel plants. The plants range from smaller 300-kilowatt to larger 2.8-megawatt plants, and they are expandable to above 50 megawatts. FuelCell said the power plants it has built have generated more than 300 million kilowatt hours (kWh) of electricity in more than 50 installations worldwide.
A major and growing market for FuelCell is in Southeast Asia, specifically in South Korea. The company just completed the construction of the largest fuel cell park in this country. The park consists of 21 power plants built by FuelCell that can generate a combined 59 megawatts of clean energy.
In Asia, FuelCell is also looking at development in Indonesia, Thailand, Malaysia, and Singapore, as my stock analysis notes. (Read about some other areas that I like in China in “If You Can Take the Risk: My Top Three Chinese Stocks.”)
As far as financials, my stock analysis indicates that the company has been inconsistent, but the future is looking brighter. In FY13, revenues came in at $187.65 million, compared to $120.60 million in FY12. In FY14, revenues are estimated to rise 7.2% to an estimated $201.16 million, followed by a rise of 22.6% to an estimated $246.54 million in fiscal 2015, according to Thomson Financial.
FuelCell is also expected to continue to reduce its losses, according to my stock analysis. In FY14, the loss is estimated at $0.12 per diluted share, declining to $0.07 per diluted share by FY15, according to Thomson Financial.
Watch the short position, which was at 12% of the float as of January 31, 2014; it could give the stock a boost if buying emerges and shorts cover, as my stock analysis suggests.
My stock analysis is to keep FuelCell on your radar, as it could be on the frontend of something big.