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FuelCell Energy Inc. Message Board

  • tucksox1 tucksox1 Jul 26, 2012 4:45 PM Flag

    Why FCEL...

    I owned FCEL roughly ten years ago after listening to the CEO during a Saturday afternoon company expose` on CNBC. I was certain that by now fuel cells would be powering millions of homes and businesses across the country. Needless to say, after waiting and waiting I decided to jump ship and licked my wounds.
    Here I am again, all of these years later, wondering how much has really changed and whether their technology still holds significant promise.
    I'd be happy to commit some capital for 5-10 years and sit patiently if someone could rationalize why I wouldn't be making the same mistake twice.
    Signing contracts such as the Navy's is great and helps the share price in the short term but I'd rather hang my hat on eventual commercialization than wait for the next government deal.
    Is that a remote possibility?

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    • Good tech, great future, LOUSY managmenet! Imho if you can't geat preferred shares that pay interest you should pass! This management has decided to dilute the stuffing out of this company when it gets ANYWHERE close to $1.50-2.00. I have bought in that range several times over the years and have ALWAYS lost big due to dilution.

    • Look man, it's your money. If you're not comfortable with the company or willing to do your due diligence, then don't invest.

      That said, this is a great time to get in. FCEL has pretty solid support around $1, so the downside risk is low. They now have a product line that is scalable, and they have market opportunities now available in Asia and Europe that where simply not there 10 years ago. Asia (South Korea and Japan in particular) is extremely well suited to distributable power growth due to the geography and expense of infrastructure. They're also very interested in green tech with small footprints, so the market is already there and growing. The investment by POSCO to build another plant in SK means a global distribution network with lower costs and no out of pocket capital required. Opportunities in Europe, particularly Germany where the Nat. Gas infrastructure is great and there is impetus from the gov't to go green, are just now lining up with a joint venture with Fraunhofer IKTS.

      FCEL isn't the "R&D" company that you bought 10 years ago. The Navy contract is just a side development, probably using their contacts at Versa Power. FCEL has their eye on becoming profitable, and they now have enough cash on hand and large enough backlog to achieve positive EBITA by 2014 (their CFOs words, not mine). That means the risk of further secondaries is low (but not impossible), IMO. Margins have been improving greatly over the last year, so much so that a down quarter still produced a flat level of gross revenue Y/Y. Further, recent developments in fuel cell technology is going vastly reduce the cost of making them in the next few years, increasing margins even further.

      That said, you shouldn't think the tech is a panacea for energy. It's still relatively niche and the current global business model is still being shaken out as a true money maker, so the risk is still there. Until they become profitable, this will be a very volatile stock. Still, the path forward is clear and looks to be positive.

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