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FuelCell Energy Is a Good Buy

May 09, 2014 | About:
kcpl

kcpl

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FuelCell Energy (FCFL) has performed well as its stock has gained 75% in the last one year, and provided investors with handsome profits. Investors can anticipate even better times from FuelCell Energy as it looks poised for solid long-term gains.

Improving the Operations

The company is taking adequate measures to clear operations and backlogs as it works on improving activity levels. FuelCell looks focused on performing well in the future as some of its programs are in the last stage of closure. Moreover, it counts on its upcoming multi-megawatt projects, and at the same time, it is determined to clear its backlogs. FuelCell has managed to bring down some of its backlogs, such as service backlogs and advanced technology backlogs, to some extent as compared to last year.

In addition, FuelCell is determined to improve its quality and operations in its manufacturing units as well. It has implemented the use of an automated laser weld cell that performs faster than plasma welding with lower costs and enhanced work. FuelCell expects strong performance from its manufacturing facilities in North America. Further, the company has proved its efficiency with the on-time completion of its 4.9 megawatt Bridgeport fuel cell park, delivering clean, baseload power to the Connecticut grid. The success of this park has attracted many investors in Connecticut and continues to attract many more as the time passes.

Having completed two large high-profile fuel cell parks in North America and Asia, the company expects solid growth in its operations. Also, FuelCell has different strategies in place that could work in favor of the company.

More Strategies

FuelCell’s South Korean partner, Posco, is working on the construction of a manufacturing facility in the region, and on the other side, the company is working with its associates to improvize its North America manufacturing facility that will help the company lower costs and attain higher operating leverage in the future.

Apart from this, the company is excited about its new project in Seoul, South Korea, where it is installing new and renewable power generation plants by using fuel cell components. Also, FuelCell is optimistic about its carbon neutral power plant installed at Microsoft (MSFT)'s Data Center Research Project in Cheyenne, Wy., which is currently being commissioned. When the plant comes into operation, FuelCell will be able to show that it is efficiently using biogas to power data centers in a sustainable and carbonless manner.

Further, FuelCell has various power plants, including the world’s largest fuel cell that provides 59 megawatts of power through 21 fuel cell plants. In South Korea, its partner Posco is engaged in building the Pohang facility to add yet another area of growth. Besides, Posco is also working on R&D to find out ways of reducing costs and providing efficient operations.

In addition, the company has identified Italy, the UK, and the Middle East as big opportunities for its business and has concrete strategic plans to cater these huge markets that can deliver certainly better platforms to increase its profit margins in the coming years.

Also it is keen to invest in product development activities in Europe in a bid to strengthen its position in the European market, which holds great promise for fuel cell technology. FuelCell is also installing a DFC-H2 facility at its Torrington manufacturing facility, which will provide hydrogen to support its manufacturing processes and help generate high quality heat to support round the clock production of ultra-clean baseload electricity.

Conclusion

As noticed earlier, fuel cell technology is slated to grow at a fast pace in the future and FuelCell Energy is looking to make the most of this opportunity. The company has already increased its presence across the world and is getting more efficient. Hence, investors looking to benefit from the future of energy should definitely consider FuelCell Energy for their portfolio.


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