Search the title and/or Eric Wesoff, May 20, 2013: "Dan Primack of Fortune again has the scoop on revenue at fuel cell "startup" Bloom Energy. And it doesn't look great.
Bloom had $42 million of pro forma revenue and negative $61 million of pro forma operating income in the first quarter of this year, according to documents obtained by Fortune. That's down significantly from the $101 million reported in pro forma Q3 2012 revenue. And yet Bloom suggests it will turn a profit in the second half of 2013, according to its CFO, as quoted by Primack."
Now, compare that to what Fuel Cell Energy is expected to report for its first quarter ended April 30, 2013.
I need to correct myself: it is an accumulated deficit which is approximately a minus $750 million, with an offset of approximately $750 million in additional paid-in capital. The net result is that FCEL has very little, if any, total equity (these numbers are just rough estimates...at October 31, 2012, the total equity was about $14 million, but that will likely become a negative number after reporting a best-guess 6 month loss as of April 30, 2013).
I'm not sure, but off the top of my head, valuation for a private company could be based on any number of things, one being the most current investment cost for a percentage of a company. So, if an institution invests $1 million for a 1% stake in the company, then the company is valued at $100 million. That same company might only have $5 million in yearly revenue with a potential of high growth and profits. Investors who got in earlier may have spent $100,000 for a 1% stake. I'm just saying that valuations can mean a lot of things, depending upon the circumstances.
Compare this to FCEL which is a publicly held company. As I remember, retained earnings is a minus $750 million. If that is so, there has been a lot of early investors who are still betting on high growth and profits. Maybe my memory on this minus $750 million is wrong. At any rate, the current valuation of FCEL at about $187 million capitalization does not reflect the amount of money poured into this venture over the years. The $187 million does reflect the expectations of the current stock holders though.
Volume is up, price is up $.05 as of 11 am, and there is not a lot of institutions holding this stock. If the institutions want investments in fuel cell companies, then FCEL is certainly a good choice IMHO. As Realtors are prone to say, "Now is the best time to buy."
I know that stocks are cyclical in ways that don't always make sense (the normal world-wide daily drama), and that there is truth in the trends (trending upward or downward with points of resistance), but there is also an argument for the underlying merits of a company which can cause it to break out (up or down). It seems to me that the fuel cell industry is gaining steam, and that FCEL is one of the strongest stocks to hold (since Bloom Energy is not public). The price of FCEL seems low in light of its potential. Some people might look at its book value and say it is over-priced. Some people might look at its EPS and say it is unprofitable. Right now, I am looking at its underlying potential to be a growth stock, with profits and good cash flow, which will then merit a decent PE ratio. If it can earn just $.25/share at a PE of 20, then it will be a $5 stock. I think it can turn a profit in the last quarter of 2013, and then earn $.25/share in 2014 or at least in 2015. So, until then, I will ignore the cycles and remain a "long" investor.
The earnings preview released this week was positive, so there is every reason to expect that the official release of 2Q earnings will be positive as well. Does anyone know historically about when FCEL might release their quarterly earnings (30 days after the quarter, 40 days, or what)? Positive information about contracts or earnings will likely push the stock price above the $1.00 base price.
ZHONGSHAN, China, April 15, 2013 /PRNewswire/ -- China Ming Yang Wind Power Group Limited ("Ming Yang" or the "Company") (NYSE: MY), a leading wind turbine manufacturer in China, today announced that through its subsidiary, Ming Yang Wind Power (International) Co., Ltd., the Company had sold all 141,062,000 of its shares of Huadian Fuxin Energy Corporation Limited ("Huadian Fuxin") (HKEx: 00816) for an aggregate consideration of approximately US$35.5 million as of April 12. The shares were acquired for an aggregate consideration of approximately US$30.0 million in connection with Huadian Fuxin's initial public offering ("IPO") in Hong Kong and listing on the Hong Kong Stock Exchange in June 2012.
Sentiment: Strong Buy
There could be multiple reasons, but several of the most usual ones could be finalizing estimates and judgements relating to assets and liabilities, for instance, is the book value of goodwill still valid and what is the proper reserve for a legal suit. At year-end, the input and blessing from external auditors is preferred because the company does not want to announce preliminary earnings which are later changed; auditors are busy at year-end with helping many companies, so there can be delays while waiting for their blessings. The whole procedure gets even more complicated when their are foreign exchange issues. Nonetheless, the companies which have well-run accounting departments will be able to release their earnings faster. I personally do not like to see releases which exceed 45 days after a quarter or year-end.
I have two stocks which I own and am considering buying more. First is Ming Yang (MY at $1.65) which is a non-state owned Chinese wind energy company. When I first purchased it at $1.70, it appeared cheap, but then it proceeded to drop to $1.20, before rebounding to $1.65 now. One problem with investing in Chinese companies is the overall lack of information (they do not seem to have Investor Relations Departments), and news is not generally readily available from China.
My second "Best Bet" is FuelCell Energy (FCEL at $1.05). I had been reading about Bloom Energy, and I saw its 20 Minutes Segment, but Bloom Energy is privately held (backed by about $1 Billion in venture capital funds). Bloom Energy did recently release some financial indicators (just Google it) at about $100 million revenue in its pro forma Q3 revenue, with cost of goods sold of $106 million, along with operating expenses of $26 million. The resulting loss for the quarter on a GAAP basis was listed at $42 million. In a like manner, FuelCell Energy is loosing money as well, but not on the same scale. If I read their recent Q4 results, they had revenue of $35.4 million, with a net loss of $8.1 million. They lost $.21/share for the year. Although FuelCell Energy is about 25-30% the size of Bloom Energy, FuelCell does have a number of large projects with big-name customers. I think it looks promising from an investor's point-of-view. Needless to say, everything I write here should be subject to your own research and opinions.