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The Market’s Best Investors Are Flocking to This Tech

0 | By Michael A. Robinson

It’s been a few years since I mentioned this clean-tech company, but it popped back up on my radar once again.

That’s because one of the market’s largest investors, BlackRock Inc. (BLK), recently scooped up 10.1 million shares of this stock, bringing its total position to an impressive 21%.

Now, if you’re familiar with Blackrock’s style, you’ll know they hold positions for an average of six years, so clearly, they’re expecting big returns over the long term.

Nothing succeeds like success, so let’s take a page from Blackrock’s book and invest right alongside, capturing our fair share of the profits.

Conditions Are Perfect for This Company to Soar

I’m sure I don’t need to talk much about gas prices. Nationally, they’re running at $4.97 a gallon, while in California, where I live, prices have topped $6.43 per gallon. In other words, they’re astronomical right now, and there’s no sign of easing up.

That’s why alternative and renewable energy – particular for transportation – is top of mind for policymakers, investors, and the general public alike.

Now, this transition to cleaner energy is inevitable, but it’s not going to happen overnight, but fortunately, the best companies in the space have been working on it for a lot longer than you might think.

Plug Power Inc. (PLUG), for instance, has been hard at it for nearly 25 years. Plug Power operates in the hydrogen fuel cell niche, and its products are top-of-the-line. It’s working on improving its already world-class hydrogen solutions, adding to its 165 fueling stations and bringing more than 50,000 fuel cells to market.

Most folks are at least familiar with the lithium-ion (Li-ion) batteries found in all sorts of electric vehicles; hydrogen fuel cells are simply another kind of battery.

Very simply put, hydrogen fuel cells produce electricity by combining hydrogen (H) and oxygen (O) molecules to form a catalyst which can power electric motors like you’d find in vehicles.

Demand for these fuel systems will surge over the coming years. First, President Biden has taken steps to convert virtually the entire non-military federal fleet of vehicles to clean fuels like hydrogen. We’re talking about more than 657,000 cars and trucks, and the administration has targeted 2027 as the changeover date.

Private-sector plans for clean battery tech, however, are even more ambitious. Currently, Boeing Co. (BA), Amazon.com Inc. (AMZN), Bayerische Motoren Werke (BMW) ADR (BMWYY), Walmart Inc. (WMT), FedEx Corp. (FDX) are Plug Power customers, and orders are filing up fast. These cells have, collectively, saved these companies millions in overhead and operating costs.

PLUG Stock Offers Proven Results

Plug Power’s performance has been extremely strong, in contrast to much of the rest of the market. The company is hard at work slashing the its costs, by as much as 30% in some areas. Revenue in the first quarter of 2022 was up 96%, year-on-year, and revenues soared from $72 million in Q1/2021 to $140.8 million in Q1/2022

The company has made a series of shrewd acquisitions to further the goal of becoming a dominant clean-energy player. They purchased Joule Processing LLC, Applied Cryo Technologies, and Frames Holding BV – respectively, industry-leading engineers, manufacturers, and systems designers. They’ve also created potentially lucrative joint ventures – HYVIA with Renault ADR (RNLSY), and another venture with Korea’s SK Group.

The share price has been beaten down along with virtually every other stock, which tells you how short-sighted a great deal of this tech selloff has been; this firm has a lock on how America will get around in the near future, yet it’s down 40% for the year. Its trailing twelve-month (TTM) price-to-earnings (PE) ratio of 19.3 is lower than the broader NASDAQ Composite, but only just.

The company’s roadmap to success is looking better and better every quarter – and heavyweights like Blackrock clearly recognize that. We should, too.

Recognizing these kinds of opportunities are the key to successful tech investing, and being able to sort the flash-in-the-pan from the potential blockbuster. I think the computing space is offering us a chance like that right now – one small company there is working on an innovation that’ll make today’s fastest PCs and smartphones seem like 1990s dial-up internet.

The thing is, I’m not the only one anticipating this unfolding change. Big banks, like JPMorgan, Bank of America, Citibank, Goldman Sachs, and others are now racing one another to get in on this new tech. I think that could spell soaring stock prices for this small company in the future.

Cheers and good investing,

Michael A. Robinson

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