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Hydrogenics - Near Term Profitability And Huge Upside

|Includes: Hydrogenics Corporation (HYGS), MNKD, TA

Email to be added to my free newsletter, I sent this out on Thursday:

I wanted to give you a heads up that I'm researching a stock for an in-depth article - Hydrogenics (NASDAQ:HYGS). It will probably be several weeks until I publish the article, but the stock is not liquid so I wanted to tell you now in case you are interested.

Hydrogenics is close to profitability now, and may be profitable in Q1 2013 depending on how orders are recognized, they have $16 million cash and a very sizable backlog, they are healthy and the excitement seems about to start.

HYGS has three businesses:

-they are a leading supplier of on-site Hydrogen generation for all sorts of industrial and fueling purposes

-they have a fuel cell business for propulsion and backup power for cell towers - they just got a $90 million propulsion order

-and the most exciting business is that they do energy storage from renewable sources. The idea is that a windmill spinning at 4 am is wasted, no other way of storing the energy can scale for use at utilities. What they do is use the energy from the windmill to split water into hydrogen and oxygen, and then they take that hydrogen and inject it directly into the natural gas system. They already are doing it in Germany where they have won 4 of the 6 contracts awarded, they are competing for 12 more there currently. They have interest elsewhere in Europe and Japan, and Enbridge - the largest distributor of natural gas in North America - recently partnered with HYGS and took an ownership stake. This is a $10 - $50 billion market.

Here is the presentation from the latest conference call:

The CEO's latest presentation:

And their site:

This is an exciting play on the Hydrogen economy, and I like it quite a bit. Remember this is not a liquid stock: if there is not an eager buying/selling counter-party when you want to get in or out you may not get a good price. That same phenomenon can work to your advantage though - if you are long and an institution wants to get long, you will enjoy a nice ride up.

My last two articles worked very well, TA has doubled and MNKD put on close to half a billion dollars market cap:

Please do your due diligence on this if you like it, I like it but there are no guarantees.

Success to trade,


Disclosure: I am long HYGS, MNKD.