Plug Power - A Follow Up

| About: Plug Power, (PLUG)

Well, I must admit a 50% pop in just a single day isn't exactly what I thought would happen when I recommended Plug Power (NASDAQ:PLUG). I knew it would continue to move higher, but this is a bit more than I had expected… even for a penny stock.

In fact, if any of my subscribers bought the stock after reading my article published on December 26th, then you've done pretty well for yourself- congratulations on a great trade!

For those that missed this article, I pointed to the return of alternative energy stocks as the investment thesis of 2013. If you recall, alternative energy stocks were abandoned for dead- at least until investors felt the promise of (or potential for) profit made headlines. And that's exactly what happened last year.

I also pointed out that a number of other alternative energy stocks made some pretty impressive recoveries- with the award for the biggest of 2013 hands down going to JinkoSolar (NYSE:JKS).

JKS climbed from a 52-week low of under $4.00, to trade just under $35 a share at one point last year. That's roughly a 700% gain!

With this group of stocks in mind, I pointed investors to one that recently broke out on good news...

PLUG - Plug Power

Plug Power Products

Plug Power is an alternative energy technology company that designs, develops, and manufactures fuel cell systems for industrial off-road markets (think forklift or other material handing vehicles).

Plug Power primarily builds and sells a hydrogen-fueled Proton Exchange Membrane (PEM) GenDrive product.

PLUG's client list includes:

  • Whole Foods (NASDAQ:WFM)
  • Firestone
  • FedEx (NYSE:FDX)
  • Mercedes Benz
  • Lowe's Home Improvement (NYSE:LOW)
  • Walmart (NYSE:WMT)
  • Stihl
  • P&G (NYSE:PG)
  • Coca-Cola (NYSE:KO)
  • Sysco (NYSE:SYY)
  • Ace Hardware
  • BMW
  • Kroger (NYSE:KR)
  • Wegmans
  • Carter's

That was the chart before the January 2nd breakout. Take a look at the one month chart of this penny stock after the move higher…

So why did the stock move 50% in a day?

The revenue guidance provided by PLUG's management in last month's update advised investors that recent orders placed by some of their larger clients would boost fourth quarter revenue. These clients were expected to sign in the company's fourth-quarter ended December generating revenue $30 million to $40 million.

And Thursday the company confirmed this is exactly what happened!

In a press release issued Thursday, Plug Power reported Q4 revenue totaled $32 million, easily meeting this target. Orders came from big clients including Walmart, Procter & Gamble, Kroger, Bridgestone, BMW, Sysco, Ace Hardware, CVS, Mercedes Benz, Lowes, and Coke.

Apparently we'll learn more in the actual earnings release expected out in February.

For investors sitting on gains in PLUG, or for those looking to buy shares of this company… what's the next move?

I recommended this stock back at $1.73 per share, and at $2.43 (after today's 50% move) I'd still recommend PLUG as a buy. With that said, I wouldn't blame anyone sitting on double-digit gains for taking some off the table.

I'm looking forward to February, when we'll hear how the company's earnings are improving. I'd be willing to bet, given the improvements in the global economy, that most companies have stepped up their capital expenditure- making PLUG an excellent long-term play!

Keeping you one step ahead,

A.J. Watkinson

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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