I do not own this stock of Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP), but I used to. 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 lost on this stock by 5.32% per year or almost 38% of the money I invested. I was ahead in 2000, but the stock started to fall in October 2000 and never recovered. The stock has been rising since early 2013 and has continued to rise in 2014. However, it is still some 75% lower than when I bought it in 1997.
Have investors made money lately? Over the past 5 years investors have made 17.57% per year. This was all capital gain, of course. This capital gain could also disappear again as quickly as it came. Over the 10 years investors have lost 5.7% per year. Again, this is all capital loss.
The good news is that this company does have revenue. The bad news is that it does not make any profit or cash flow from this revenue. Revenue peaked in 2003 and has fluctuated, but basically has been declining since. However, analysts expect revenues to pick up again over the next few year.
As far as earnings go, the company had one year of profit in the past 10 years and that was in 2005. The company has had no positive cash flow in any year in the past 10 years.
Another good thing is the debt ratios. The Liquidity Ratio is 2.30, the Debt Ratio is 2.30 and the Leverage and Debt/Equity Ratios are 1.71 and 0.71. These are all great ratios.
There are not many analysts following this stock. When I look at analysts' recommendations I find Strong Buy and Hold recommendations. The consensus recommendation would therefore be a Buy. The 12 month consensus stock price is $3.88 US$. This is some 6.3% lower than today's US$ price of $4.14.
There is an investors news alert on Ballard on Market News Call after the stock jumped up 5% today. There is also a news article in the Wall Street PR about Ballard Power profiting from Toyota producing a fuel cell car. However, I heard all this before in 1997 when I first invested in this company. The fuel cell car went nowhere then. Is it different this time?
Sound bit for Twitter and StockTwits is: invest on hope, not financials. That is people are still probably investing in this company as I did, on hope, not because of the financials. I thought it was good that the company had revenue at the time I bought it. However, at some point a company must make earnings and cash flow. On the other hand, this company has survived a long time without much of either. See my spreadsheet at bld.htm.
I will have only one entry for this stock as I must do on some stock because I cover too many stocks to do double entries on all that I follow.
Ballard Power Systems, Inc. is a global leader in PEM (proton exchange membrane) fuel cell technology. They provide clean energy fuel cell products enabling optimized power systems for a range of applications. Ballard offers smarter solutions for a clean energy future. Its web site is here Ballard.
This blog is meant for educational purposes only, and is not to provide investment advice. 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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Do you think that Ballard Power has ripen since then?...
ReplyDeleteNow, they have multiple products and Toyota is in the process of developing hydrogen cell cars?..
When I was investing in 1997 there were several car companies interested enough in Ballard's fuel cells to give Ballard money to help with their research. So one car company being interested in fuel cells today is not really an improvement.
ReplyDeleteSince the discovery of the fuel cell goes back the 1800's and the first hydogen one to work goes back to the early 1900's, you got to wonder if we are ever going to get to a tipping point.
If you look at the financials they have improved greatly and managements refocusing of the business on near term commercial markets has set the stage for profitability, probably happened in Q2. Also there are over 15 auto manufacturers heavily investing in FCV's with 3 manufacturers rolling out cars in 2015. A far cry from 2000 when Ballard was a much different company, as was the market for fuel cells.
ReplyDeleteI looked at Reuter's report and no analysts is suggesting postive EPS for June or September of 2014. However, some are suggesting perhaps postive EPS in 2015.
ReplyDeleteI still follow this company as I have a soft spot for it still. Although I wonder if cars do go the way of fuel cells of what will happen to our climate if we have millions of cars producing water vapor. Will this produce more cloud cover and therefore a cooler climate. I have found no place that addresses this.