Is it a good company at a reasonable price? This company has revenue, but not earnings or cash flow. It has money because people keep putting money into it. Therefore, any holding of this stock is highly risky. At the current time, my testing seems to say that the stock price is relatively expensive. However, since I cannot do most testings, I do because of lack of earnings and cash flow, it is probably anyone guess on the reasonableness of the stock price.
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 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 never recovered.
When I was updating my spreadsheet, I noticed that the stock price is growing better than any other item. Although, the stock price has gone up and down quite a bit. The stock has revenue, but no earnings and no cash flow. People are willing to invest in this stock and therefor the company has cash.
| Year | Item | Tot. Growth | Per Year |
|---|---|---|---|
| 5 | Revenue Growth US$ | -30.92% | -7.13% |
| 5 | EPS Growth | -1080.00% | N/C |
| 5 | Net Income Growth | -2227.41% | N/C |
| 5 | Cash Flow Growth | -1253.10% | N/C |
| 5 | Dividend Growth | 0.00% | 0.00% |
| 5 | Stock Price Growth | 8.16% | 1.58% |
| 10 | Revenue Growth | 91.77% | 6.73% |
| 10 | EPS Growth | -22.92% | -2.57% |
| 10 | Net Income Growth | -442.82% | N/C |
| 10 | Cash Flow Growth | -369.59% | N/C |
| 10 | Dividend Growth | 0.00% | 0.00% |
| 10 | Stock Price Growth | 681.97% | 22.83% |
If you had invested in this company in December 2012, for $1,000.40 you would have bought 1640 shares at $0.61 per share. In December 2022, after 10 years you would have received $0 in dividends. The stock would be worth $10,627.20. Your total return would have been $10,627.20. This is a total return would be 26.66% per year all from capital gain of 26.66%.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $0.61 | $1,000.40 | 1640 | 10 | $0.00 | $10,627.20 | $10,627.20 |
This stock never had a dividend. I originally bought into this stock because I thought it was a great idea. I had it for 9 years and sold it in 2006 because I did not think that the stock or the company was going anywhere.
Debt Ratios are very good. The Long Term Debt/Market Cap Ratio for 2022 is 0.01 and is very low and very good. The Liquidity Ratio is very high at 14.06 as is the Debt Ratio at 14.14. This is because a good ratio for the Liquidity Ratio and Debt Ratio is considered good at 1.50. These will go down as the company uses up its cash. The Leverage and Debt/Equity Ratios are good and low at 1.08 and 0.08 respectively.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.01 | 0.01 |
| Intang/GW | 0.05 | 0.05 |
| Liquidity | 14.06 | 14.24 |
| Liq. + CF | 12.25 | 12.40 |
| Debt Ratio | 14.14 | 14.58 |
| Leverage | 1.08 | 1.07 |
| D/E Ratio | 0.08 | 0.07 |
The Total Return per year is shown below for years of 5 to 27 to the end of 2022 in CDN$. 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. |
|---|---|---|---|---|---|
| 2017 | 5 | 0.00% | 3.11% | 3.11% | 0.00% |
| 2012 | 10 | 0.00% | 26.66% | 26.66% | 0.00% |
| 2007 | 15 | 0.00% | 1.35% | 1.35% | 0.00% |
| 2002 | 20 | 0.00% | -4.64% | -4.64% | 0.00% |
| 1997 | 25 | 0.00% | -6.66% | -6.66% | 0.00% |
| 1995 | 27 | 0.00% | 0.96% | 0.96% | 0.00% |
The Total Return per year is shown below for years of 5 to 27 to the end of 2022 in US$. 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. |
|---|---|---|---|---|---|
| 2017 | 5 | 0.00% | 1.58% | 1.58% | 0.00% |
| 2012 | 10 | 0.00% | 22.83% | 22.83% | 0.00% |
| 2007 | 15 | 0.00% | -0.57% | -0.57% | 0.00% |
| 2002 | 20 | 0.00% | -10.82% | -10.82% | 0.00% |
| 1997 | 25 | 0.00% | -6.48% | -6.48% | 0.00% |
| 1995 | 27 | 0.00% | 0.99% | 0.99% | 0.00% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are all negative and so useless. The corresponding 10 year ratios are negative and useless. The corresponding historical ratios are negative and useless. They are not expected to have any positive earnings in the near future.
I cannot calculate a Graham Price as the Graham Price formula includes the EPS. Most EPS are negative as the company has had earnings losses for most of the past 27 years that I have data. EPS losses will not work in this formula.
I get a 10-year median Price/Book Value per Share Ratio of 3.71. The current P/B Ratio is 1.21 based on a stock price of $4.58, Book Value of $1,127M and Book Value per Share of $3.78. The current ratio is 67% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap. This testing is in US$ but you will get a similar result with CDN$.
I get a 10-year median Price/Cash Flow per Share Ratio that is negative. The company also has a negative cash flow, so I cannot do any testing using the P/CF Ratios.
Since the company pays not dividends, I cannot do any dividend yield testing.
The 10-year median Price/Sales (Revenue) Ratio is 6.11. The current P/S Ratio is 8.76 based on Revenue estimate for 2023 of $156M, Revenue per Share of $0.52 and a stock price of $4.58. The current ratio is 43% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is probably expensive. The P/S Ratio test says this. The P/S Ratio test depends on what is expected in the future. The other test that I got results from was the P/B Ratio test which said that the stock price was cheap. However, the P/B Ratio test tends to be about the pass. So, I will do with the P/S Ratio test.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (1), Hold (17), Underperform (2) and Sell (2). In other words, the analysts’ recommendations are all over the place. The consensus would be a Hold. The 12 months stock price consensus is $5.45 CDN$ ($4.129 US$). This implies a capital loss of 9.83% over the next year.
There are a lot of Do Not Buy on Stock Chase by analysts. The last one says that it is risky, but a long term hold. Stock Chase gives this stock 3 stars out of 5. Puja Tayal on Motley Fool says this is a clean energy stock for a sustainable future. Adam Othman on Motley Fool talks about this company being a green energy stock. The company put out a Press Release on Newswire about their results for 2022. The company put out a Press Release on newswire about their first quarter of 2023 results.
Simply Wall Street report on Yahoo Finance talks about the company’s cash burn. Simply Wall Street gives one 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 is a world leader in proton-exchange membrane fuel cells, power system development, and commercialization. The company's principal business is the design, development, manufacture, sale, and service of PEM fuel cell products for a variety of applications, focusing on power product markets of heavy-duty motive (bus, truck, rail, and marine applications), material handling, and stationary power generation. Sales are concentrated in the U.S., Europe, and China. 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 Friday, July 28, 2023 around 5 pm. Tomorrow on my other blog I will write about Investing Books .... learn more on Thursday, July 27, 2023 around 5 pm.
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