Stock Alert for FuelCell Energy Inc. (FCEL)
  • Stock Alert for FuelCell Energy Inc. ($FCEL)
  • Alternative Energy Trade Option: Energy Conversion Devices Inc. (ENER) Review
  • " />

    Stock Alert for FuelCell Energy (FCEL)

    FuelCell Energy (FCEL) manufactures ultra-clean stationary fuel cell power plants that generate electricity with up to twice the efficiency of conventional fossil fuel plants – and with virtually no air pollution. It owns and operates a manufacturing plant in Torrington, Connecticut, with a capacity of 70 MW per year (up to 90 MW per year with full utilization). The Company’s Danbury, Connecticut headquarters acts as the nerve center for its commercial, industrial and grid-support applications. Danbury is also the hub for the Company’s GTAC (Global Technical Assistance Center) which remotely monitors and operates DFC power plants worldwide. FCEL’s Direct FuelCell (DFC) power plants have generated over 650 million kW hours of electricity and currently has over 50 installations worldwide.

     Share Statistics (07-Sept-11) FY2009 FY2010 % Chg Q22010 Q22011 % Chg
    Symbol FCEL Revenue, $Mn 88.02 69.78 -20.7% 16.59 28.61 72.5%
    Current price $1.29 Gross marg. -34.1% -26.7% -21.7% -35.0% -38.0% 8.6%
    52wk Range: $0.98-$2.41 Oper. margin -77.9% -69.3%
    Avg Vol (3m): 1,948,040 Net margin -78.0% -79.8% 2.3% -95.7% -69.8% -27.0%
    Market Cap. 163.80M
    Shares Outstanding 126.98M EPS, $ -0.99 -0.63 -36.4% -0.20 -0.24 20.0%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Share of FCEL have gained 9.3% in the last week; 11.2% in the last month; and 17.3% year-to-date.

    Shares of the Danbury, Connecticut-based alternative energy provider traded higher on Wednesday after the company announced the sale of a sub-megawatt Direct FuelCell (DFC) module to partner POSCO Power for installation at a showcase location in Indonesia, expanding its market reach in Asia.

    According to the press release, POSCO Power will combine the fuel cell module with locally manufactured balance of plant and install the complete fuel cell power plant at a heavily visited waterpark resort in Jakarta, Indonesia. This high exposure installation will demonstrate the benefits of ultra-clean, efficient and reliable power generation as POSCO Power develops a market for megawatt class power plants in Southeast Asia, starting with Indonesia and to be followed by Thailand, Malaysia and Singapore.

    Indonesia is the fourth most populous country in the world with a population of approximately 245 million and is the world’s eighth largest producer of natural gas. With growing power needs from an expanding urban middle class, Indonesian utilities need scalable baseload distributed generation. The virtual lack of emissions combined with quiet operation of DFC plants, facilitates their siting in populated areas. The scalable nature of DFC plants permits utilities to add power in cost effective increments as demand warrants. Distributed generation also improves energy security and energy reliability while reducing the need to build and maintain costly transmission and distribution.

    “With this strong market development base of expertise and having developed strong ties with the Indonesian Government, POSCO Power is well positioned to build on their success in South Korea with fuel cell power plant exports throughout Indonesia and Southeast Asia,” stated Chip Bottone, president and CEO for FCEL.  According to him, POSCO Power has ordered 140 megawatts of ultra-clean Direct FuelCell power plants and fuel cell components since 2007.

    As the market in Indonesia and Southeast Asia develops, FCEL will build and export the core fuel cell components to South Korea where POSCO Power will stack the components to create fuel cell modules. The modules will be combined with locally built or sourced balance of plant and the completed DFC plant will be shipped to Indonesia. On top of the revenue generated from the sale of components, POSCO Power will pay a royalty to FCEL for each complete power plant built under a 2009 licensing agreement, the report said.

    Source: http://fcel.client.shareholder.com/releasedetail.cfm?ReleaseID=603702

    Financial Summary

    FCEL reported total revenues for the third quarter of 2011 of $31.2 million, an increase of 65% compared to $18.9 million posted in the same period last year.  Product sales and revenues in the third quarter were $29.4 million compared to $16.2 million in the prior year quarter, due to increased demand for Direct FuelCell (DFC) power plants. Product sales and revenues for the third quarter of 2011 included $21.2 million of power plants and fuel cell kits, $5.5 million primarily from installation services and revenue from the 100 kilowatt (kW) joint development agreement with POSCO Power, and $2.7 million from service agreements.

    The Company generated a gross profit for the third quarter of 2011 from products and services of $0.2 million, an important milestone on the path to profitability and the first quarterly gross profit since commercializing its DFC technology. The product cost-to-revenue ratio was 0.99-to-1.00 for the third quarter of 2011 compared to 1.24-to-1.00 for the third quarter of 2010. Increased production volume drove down product costs and contributed to improved absorption of fixed overhead costs as manufacturing and supply chain efficiencies were achieved. Margins for product sales and revenues improved $4.1 million compared to the third quarter of 2010.

    Increasing demand for fuel cells and service agreements, including the $129 million order for 70 megawatts (MW) of fuel cell kits and other equipment and services announced in May 2011, drove product sales and service backlog to $230.6 million as of July 31, 2011, compared to $79.8 million as of July 31, 2010. Product backlog was $152.9 million and $55.2 million as of July 31, 2011, and 2010, respectively. Product backlog will be delivered through October 2013. Service agreement backlog was $77.7 million and $24.6 million as of July 31, 2011, and 2010, respectively, and consists of service agreements up to 20 years in duration.

    Research and development contract revenue was $1.8 million for the third quarter of 2011 compared to $2.7 million for the third quarter of 2010. The Company’s research and development backlog totaled $13.6 million as of July 31, 2011, compared to $7.4 million as of July 31, 2010, with the increase due to awarding of the phase three of the solid oxide fuel cell (SOFC) contract by the U.S. Department of Energy (DOE) in May 2011.

    Loss from operations for the third quarter of 2011 decreased to $7.4 million compared to $12.6 million for the comparable prior year period reflecting increased sales volume combined with lower costs.

    Net loss to common shareholders for the third quarter of 2011 decreased to $8.6 million, or $(0.07) per basic and diluted share, compared to $13.8 million or $(0.15) per basic and diluted share in the third quarter of 2010.

    Total cash, cash equivalents and investments in U.S. Treasuries were $49.5 million as of July 31, 2011. Net use of cash, cash equivalents and investments in the third quarter of 2011 was $5.5 million consisting of $0.9 million net cash used in operating activities, $1.1 million net cash used from investing activities and $3.5 million net cash used in financing activities. Capital spending for the third quarter of 2011 was $0.5 million and depreciation expense was $1.6 million.

    Source: http://fcel.client.shareholder.com/releasedetail.cfm?ReleaseID=603593

    Financial Strength (07-Sept-2011)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 1.00 0.30 1.30 0.76
    Current Ratio (MRQ) 1.43 0.40 1.63 1.12
    LT Debt to Equity (MRQ) 5.75 49.14 110.91
    Total Debt to Equity (MRQ) 7.61 72.40 149.31
    Interest Coverage (TTM) -27.50 0.01 0.33 23.25

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    Analyst Recommendations and Revisions

    1-5 Linear Scale

    Current

    1 Month
    Ago

    2 Month
    Ago

    3 Month
    Ago

    (1) BUY 2 3 3 3
    (2) OUTPERFORM 3 2 2 2
    (3) HOLD 1 1 1 1
    (4) UNDERPERFORM 0 0 0 0
    (5) SELL 0 0 0 0
    No Opinion 0 0 0 0
    Mean Rating 1.83 1.67 1.67 1.67

    Source: http://www.reuters.com/finance/stocks/analyst?symbol=FCEL.OQ

    Consensus Estimates Analysis

    # of Estimates

    Mean

    High

    Low

    1 Year Ago

    SALES (in millions)
    Quarter Ending Oct-11 6 31.91 39.60 28.20 35.25
    Quarter Ending Jan-12 2 34.55 36.80 32.30
    Year Ending Oct-11 6 117.47 125.30 113.10 111.08
    Year Ending Oct-12 6 163.21 183.93 144.00 234.65
    EARNINGS (per share)
    Quarter Ending Oct-11 6 -0.08 -0.06 -0.09 -0.07
    Quarter Ending Jan-12 2 -0.06 -0.06 -0.07
    Year Ending Oct-11 6 -0.44 -0.33 -0.51 -0.37
    Year Ending Oct-12 6 -0.19 -0.12 -0.26 0.09

    Technical Analysis

    Source: http://stockcharts.com

    On Tuesday, FCEL closed above its 20-day moving average. This is generally considered to be an indication of a bullish trend.

    FCEL is within its Bollinger Bands. This is a normal condition suggesting that it is neither overbought nor oversold relative to the recent levels.

    FCEL’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Sept07-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    Ingersoll-Rand PLC IR 34.46 11.41B 11.60 9.29 0.77 0.73
    Cummins Inc. CMI 90.50 17.45B 10.17 8.59 0.97 0.85
    Ballard Power Systems Inc. BLDP 1.42 119.83M n/a n/a 1.39 1.10
    United Technologies Corp. UTX 72.96 66.30B 13.36 11.84 1.14 1.08
    Industrial Electrical Equipment Median       12.64 n/a 1.18 n/a
    FuelCell Energy Inc. FCEL 1.29 163.80M n/a n/a 1.39 1.00

    Source: Thomson Financial

    DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority.  We are neither licensed nor qualified to provide investment advice.

    The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice.  The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities.  We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

    Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company.  An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report.  Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

    Any individual who chooses to invest in any securities should do so with caution.  Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

    Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934.  Subscribers are cautioned not to place undue reliance upon these forward looking statements.  These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated.  Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC.  You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

    We are committed to providing factual information on the companies that are profiled.  However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions.  We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so.  Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

    To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

    We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.

    Leave a Reply

    Your email address will not be published. Required fields are marked *