Ballard's Management Deserves Recognition While Peers Are Diluting

Mar.29.12 | About: Ballard Power (BLDP)

The fuel cell industry has had its hiccups, but it is now steadily growing revenues. Four pure play fuel cell companies that I follow are Ballard Power (NASDAQ:BLDP), Hydrogenics (NASDAQ:HYGS), Fuel Cell Energy (NASDAQ:FCEL), and Plug Power (NASDAQ:PLUG). None of my following are profitable as of Q4 2011, but each holds its own potential. Analysts have projected Ballard Power to be the first profitable company with an EPS of $0.05 in 2013. As of FY2011, only Hydrogenics and Ballard Power had the economies of scale to sell products at positive gross profit margins with Hydrogenics leading the pack at 26% and Ballard following at 18%.

Since profits can only be projected at this point and dilution appears to be coming across the board, it is important to give Ballard Power management recognition. It is a company that has managed cash best when as compared to its peers in order to protect shareholders. Instead of using the market as an ATM as other sector companies of its market cap position have, Ballard has consistently navigated its business decisions to avoid dilution and maintain shareholder rights to future profits.

Observe the following tables in order to make your own judgment. Ballard Power has kept dilution around 1% while the industry average has been an average of around 30%. Though Ballard shares can be considered at a premium on a revenue per share basis, it has been the sure winner when considering revenue growth in comparison to shares outstanding.

Table 1 (3 Year Revenue Growth)

Company Revenue Q4 2009 (thousand) Revenue Q4 2010 (thousand) Revenue Q4 2011


BLDP 46,722 65,019 76,009
HYGS 18,841 20,930 23,832
FCEL 88,016 69,777 122,570
PLUG 12,293 19,473 27,629
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Table 2 (3 Year Dilution)

Company Number of Shares Q4 2009 (thousand) Number of Shares Q4 2010 (thousand) Number of Shares Q4 2011 (thousand)
BLDP 83,637 84,102 84,148
HYGS 3,698 4,690 6,180
FCEL 72,393 93,926 124,498
PLUG 12,911 13,123 22,676
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Table 3 (Revenue per Share)

Company Revenue Per Share 2009 Revenue Per Share 2010 Revenue Per Share 2011
BLDP 0.56 0.77 0.90
HYGS 5.09 4.56 3.86
FCEL 1.22 0.74 0.98
PLUG 0.95 1.48 1.21
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Table 4 (Dilution Rate)

Company 2010 Dilution Percent 2011 Dilution Percent
BLDP 1% 0%
HYGS 27% 32%
FCEL 30% 33%
PLUG 2% 75%
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Disclosure: I am long BLDP.