Can the Fuel Cell Rally Sustain Itself?

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Fuel cell stocks were on the move yet again on Monday, a trend that has been gathering steam. 24/7 Wall St has gone over the key fuel cell stocks that trade in the US major markets which all had gains on the day of at least 5%. Each of these stocks were moving higher for different reasons, but as a whole what this really looks and feels like is a continued pull higher in the speculative alternative energy sector around fuel cells. The question to ask may sound simple, but is far from simple — can fuel cell stocks keep rallying?

FuelCell Energy Inc. (NASDAQ: FCEL) announced Thursday that it will receive funding from the state of Connecticut in terms of $20 million in loans and tax credits. It is expected that 325 jobs will be added within the next four years to its current Connecticut workforce of 538 employees. The state Department of Economic and Community Development will lend $10 million at 2% interest over the course of 15 years as the company reaches employment and revenue targets. FuelCell is eligible for $5 million in loan forgiveness if it can create 165 full-time jobs on the first level, then another $5 if it can create another 160 full-time jobs. Ultimately the expansion project may also claim up to $10 million in tax credits. Shares of FuelCell closed Wednesday before this announcement at $1.77.

Following the announcement, FuelCell shares have been as high as $2.28 or nearly 29% on Monday. Over 21 million shares have moved since the announcement last Thursday with nearly half having moved on Monday. The company’s stock has a consensus analyst price target of $2.68 and a 52-week trading range of $1.28 to $4.74.

Plug Power Inc. (NASDAQ: PLUG) announced last Wednesday that it would be providing Golden State Foods with its GenDrive hydrogen fuel cells to power 39 material handling vehicles. Plug will also provide GenCare onsite maintenance and service for these vehicles. Golden State Foods services works with a range of companies from Taco Bell to Starbucks. Shares of Plug closed Thursday at $4.49, since then have moved up over 20% to a high of $5.40 on Monday. Shares were recently trading at $5.23, on Monday, up 11% from the previous close of $4.71.

Over 42 million shares of Plug Power have moved since the announcement on Thursday morning with about half coming from Monday alone. The company’s stock has a consensus analyst price target of $7.38 and a 52-week trading range of $0.45 to $11.72.

Quantum Fuel Systems Technologies World Inc. (NASDAQ: QTWW) announced on Monday morning that it had entered into an agreement with Fisker Automotive to license its plug-in hybrid control software for $2 million payable this November and an additional $2 million payable by late October 2015. This is expected to support the re-launch of Fisker’s Karma vehicle, and after the second $2 million is paid the license will be expanded into Fisker’s Atlantic vehicle line.

The agreement would go on to state that Quantum would be Fisker’s exclusive development partner until Fisker exercises its option to acquire joint-ownership of hybrid control software. Shares of Quantum were recently trading up over 9% at $4.35. The company’s stock has a consensus analyst price target of $7.70 and a 52-week trading range of $2.99 to $11.25.

There hasn’t been much news on Ballard Power Systems Inc. (NASDAQ: BLDP) for its gain on Monday, and it was downgraded last week by Jennings to a Hold rating from Buy and the price target was lowered to $3 from $5. However, it is still tailing all these fuel cell stocks on continued buying. Its shares have recently been trading up about 5% at $2.94 in the last hour of trading. It has moved about 3 million shares on the day marking above average volume trading for 3 of the past 5 days. The company’s stock has a consensus analyst price target of $3.75 and a 52-week trading range of $1.25 to $8.38.

*Just as a reminder on analyst price targets, these companies are small cap stocks and the price targets may be from only a handful of analysts.