On Feb 10 fuel-cell manufacturer Plug Power (PLUG) announced they had won a deal to supply an undisclosed major North American retailer with power units over the next two years. The announcement caused an immediate uptick in share price, which has become a common refrain for what has become the hottest small-cap Tech stock on the market.
Plug Power has a long, storied history of failing to meet expectations and disappointing investors. However, past performance does not indicate future returns, and lucky investors who bought into Plug Power at the bottom have been rewarded handsomely. The company has increased four-fold in value since November, reversing years and years of substantial losses.
The first indications Plug Power was finally turning things around came in late November, when CEO xx announced that for the first time in 16 years the clean-energy company was expecting to turn a profit. Shares climbed further up on a major deal with FedEx (FDX) that would see Plug Power expand from producing fuel cells for forklifts to outfitting a fleet of delivery trucks for a major carrier.
US governmental support for increasing the range of electric trucks has further spurred Plug Power, as the company positions themselves to be on the forefront of the nascent electrically-powered industrial vehicle market
While the bottom seems poised to fall out for Plug Power, the onslaught of positive developments, increased revenue, and newfound profitability keep sending shares upwards. Indeed, a significant price check in December that saw shares plummet some 25 percent has almost been erased.
Despite the run, Plug Power maintains an analyst consensus of “strong buy.” However, it should be noted that Plug Power is no stranger to investor overexuberance, with shares once reaching over $1500 during the height of the tech bubble. Whether the current run is another bubble or just the market catching up to Plug Power’s vision remains to be seen.
Shares of Plug Power climbed 14.52 percent to hit $3.55 a share. The company were trading at just 53 cents in November 2013.
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