Is it a good company at a reasonable price? Currently, I would not buy this stock. I am still following it because I owned it in the past and I am still curious on how it is doing. You should not invest in this stock money you cannot afford to lose. The stock price seems to be relatively cheap, but that does not say it is a good buy. Fuel Cells may yet be the next big thing. It is hard to tell at this point. I note that analysts recommendations are all over the place.
I do not own this stock of Ballard Power Systems Inc (TSX-BLDP, NASDAQ-BLDP). Back in 1997, I read about Ballard and fell in love with the idea of cars running with fuel cells. I could help save the environment and also make some money. It was very attractive. I sold this stock in 2006 because it had lost its attraction. It did not seem that Ballard fuel cells would be in any car anytime soon. I was ahead in 2000, but the stock started to fall in October 2000 and did not look like it would recover anytime soon and I sold in 2006. It made a recover in 2020, but has since fallen again.
When I was updating my spreadsheet, I noticed that expected Revenue for 2023 was $150M, but it came in as $102M. Expected increase was 86%, but increase was only 22%. Also, earnings loss was expected to decrease by 25%, but it has stayed the same. Note that this company gets money mainly from issuing new shares.
If you had invested in this company in December 2013, for $1,001.42 you would have bought 622 shares at $1.61 per share. In December 2023, after 10 years you would have received $0.00 in dividends. The stock would be worth $3,054.02. Your total return would have been $3,054.02. This would be a total return of 11.80% per year with 11.80% from capital gain and 0.00% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $1.61 | $1,001.42 | 622 | 10 | $0.00 | $3,054.02 | $3,054.02 |
This stock has never paid a dividend, so there is no dividend information or dividend payout ratios.
Debt Ratios are good and will remain good as long as they can continue to raise cash. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.01 and currently at 0.04. The Liquidity Ratio for 2023 is good at 12.25 and 11.66 currently. The Debt Ratio for 2023 is good at 12.48 and 10.63 currently. The Leverage and Debt/Equity Ratios for 2023 are good at 1.09 and 0.09 and currently at 1.10 and 0.10.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.01 | 0.04 |
| Intang/GW | 0.04 | 0.06 |
| Liquidity | 12.25 | 11.66 |
| Liq. + CF | 11.01 | 10.27 |
| Debt Ratio | 12.48 | 10.63 |
| Leverage | 1.09 | 1.10 |
| D/E Ratio | 0.09 | 0.10 |
The Total Return per year is shown below for years of 5 to 28 to the end of 2023. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | 0.00% | 8.40% | 8.40% | 0.00% |
| 2013 | 10 | 0.00% | 11.80% | 11.80% | 0.00% |
| 2008 | 15 | 0.00% | 9.04% | 9.04% | 0.00% |
| 2003 | 20 | 0.00% | -5.49% | -5.49% | 0.00% |
| 1998 | 25 | 0.00% | -8.23% | -8.23% | 0.00% |
| 1995 | 28 | 0.00% | -0.06% | -0.06% | 0.00% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are negative and useless. The corresponding 10 year and historical median ratios are also negative and useless. Basically, this company has had earnings losses, just that some losses were less bad than others.
You cannot really do a Graham Price test because of earnings losses. However, if you assume that the company is making a $0.01 profit each year, I get a Graham Price of $0.99. The 10-year low, median, and high median Price/Graham Price Ratios would be 5.12, 8.72 and 12.13. The current ratio would be 3.14 based on a $0.01 profit and a stock price of $3.11. This ratio below the low ratio of the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. But this is a rather dubious test. This testing would be in CDN$.
I get a 10-year median Price/Book Value per Share Ratio of 3.71. The current P/B Ratio is 0.71 based on a stock price of $2.26, Book Value of $952M, and Book Value per Share of $3.18. The current ratio is 81% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$, but you will get a similar result in CDN$. This is a valid test.
I cannot to any Price/Cash Flow per Share Ratio testing as the cash flow is negative.
I cannot do any dividend yield testing, because there are no dividends.
The 10-year median Price/Sales (Revenue) Ratio is 8.64. The current P/S Ratio is 5.99 based on Revenue estimate for 2024 of $113M, Revenue per Share of $0.38 and a stock price of $2.26. The current ratio is 31% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$, but you will get a similar result in CDN$. This is a valid test.
Results of stock price testing is that the stock price is probably cheap. This is taking the results of the P/S Ratio test and it is a good one. The other good test is the P/B Ratio test and this says the stock is cheap and it is a good test. However, most testing I could not do. This was due to the lack of earnings and cash flow.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (1), Hold (13), Underperform (1) and Sell (1). The consensus would be a Hold. The 12 months stock price consensus is $4.48 ($3.26 US$) with a high of $6.18 ($4.50 US$) and low of $2.75 ($2.19 US$). The consensus stock price of $.48 ($3.26 US$) implies a total return of 43.89%, all from capital gains based on a current stock price of $3.11 ($2.26 US$).
There is only one entry on Stock Chase for 2024 and it is a Wait. They think it holds promise, but you need a long term view for this stock. Stock Chase gives this stock 3 stars out of 5. Last year, most of the entries were Do Not Buy. Adam Othman on Motley Fool thinks this stock has potential. Puja Tayal on Motley Fool says the stock has possible windfall returns. The company put out a Press Release on their fourth quarter of 2023. The company put out a Press Release about their first quarter of 2024.
Simply Wall Street via Yahoo Finance reviews this stock. Simply Wall Street has 1 warning of currently unprofitable and not forecast to become profitable over the next 3 years. Simply Wall Street gives this stock 2 and one half stars out of 5.
Ballard Power Systems focuses on developing and bringing to market PEM fuel cell systems for transportation, stationary, and portable applications. Ballard now offers key subsystems and components that are based on technology developed in support of Ballard fuel cell products. Its web site is here Ballard Power Systems Inc.
The last stock I wrote about was about was Savaria Corporation (TSX-SIS, OTC-SISXF) ... learn more. The next stock I will write about will be Loblaw Companies Ltd (TSX-L, OTC-LBLCF) ... learn more on Monday, July 29, 2024 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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