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My scope is to assist private companies both abroad and domestic wishing to go public in the U.S. We invest in the company in the earliest stages, and assist in coordinating their audit, legal RTO or IPO. We also offer M&A identification, execution and consulting, Investors relations... More
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  • Should You Be Looking Into Fuel Cell Technology? 1 comment
    Aug 15, 2014 6:42 AM | about stocks: HYGS

    (click to enlarge)Investing in the "next big thing" early and riding the wave to stardom is every investor's goal. However, hindsight is always 20/20 and investors in early tech startups would have had to process a lot of market and corporate events in order to become major millionaires. Unfortunately, this is easier said than done and finding the next big thing is extremely challenging. In fact, most people who attempt this form of investing do not end up making it, and in some cases, lose their investment. However, that is the aggressive form of emerging growth and certainly this "high risk, high reward" form of investing is not for everyone. While some argue that 3D printing or fuel cells are the next big things, it still remains to be seen. But for sake of argument, lets take a look at Hydrogenics Corporation (NASDAQ: HYGS), a fuel cell company.

    Turning to the fundamentals, Hydrogenics has a market cap of $213.51 million and is currently rated a "Buy" by analysts. The company currently does not have a price to earnings ratio, however forward price to earnings comes in at 152.36. Price to sales is at 5.6, price to book is a whopping 49.6, and price to cash is 22.96. Total debt to equity stands at 1.03 and cash per share is .93, giving the company a current ratio of 1.20. Earnings are expected to rise 40.2 percent this year, 128 percent next year, and 25 percent over the next five years. Sales quarter-over-quarter have fallen 34.7 percent and earnings per share has fallen 173 percent quarter-over-quarter. Despite the horrid earnings report misses, Hydrogenics has performed very well: up 51.71 percent in the past year, and up 11.38 percent year-to-date. Most of these gains could be thanks, in part, to the major fuel cell rally that took place for several months before correcting in March.

    Overall, it appears Hydrogenics is the epitome of what a growth stock looks like with its overvalued valuation ratios, but that is made up for in high earning's growth forecasts. Obviously, when a company is growing hand over fist, there is not going to be a lot of opportunities to buy it "on sale". However, I will say that the company's book to share ratio of .43 is not good at all and this is certainly a cause for concern, in my opinion. Investors are reminded that fuel cell technology is still a new, emerging idea that has had little widespread trials to determine the longevity or potential success. Many fuel cell companies are either not profitable or are just finally reaching that point, which will be an issue once the market corrects.

    Be sure to do your own research.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: HYGS
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  • jgp3d
    , contributor
    Comments (4) | Send Message
    Hydrogen is a proven energy technology being deployed, as we speak, by forward looking nations and governments that realize energy independence is key to stability and long-term growth. $HYGS is the leader in this field, and is well poised to capitalize on this growing demand for alternative energy storage/capture methods. Just look at the recent contracts they have entered. The risk here is not getting on board while the stock is hovering around $24, because a year from now, you will look back and realize how cheap that really was. Long $HYGS.
    19 Aug 2014, 02:41 PM Reply Like
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