It’s never a good idea to judge a book by its cover. However, if we look at the article titles of the three most recent Fool.ca pieces coveringĀ Ballard Power Systems Inc.Ā (TSX: BLDP)(NASDAQ: BLDP), we can see an interesting trend:
January 29: Why Ballard Power Systems Inc. Is Soaring Over 18%
January 26: Why Ballard Power Systems Inc. Tanked Over 13.72% on Thursday
November 26: Why Ballard Power Systems Inc. Soared 10.45% on Thursday
The volatility displayed by shares of Ballard is noteworthy, with investors largely piling into sectors such as blockchain, emerging technologies, and cannabis of late. Finding the “next big thing,” to invest in could be a key driver of sectors such as fuel cells forward in the medium term.
Unfortunately for all the Foolish readers out there, I definitely don’t have a crystal ball and won’t be able to predict the direction the market chooses to take or the speed at which investors choose to stampede into a given sector. That said, witnessing the insanity of investors in sectors such as cannabis and cryptocurrencies, the idea that fuel cell technology could take off very shortly here has become less of a far-fetched idea and more of an opportunity some investors have clearly begun to explore.
When a stock is highly sensitivity to news (positive or negative), the risk profile of said equity is typically considered to be much higher than that of a correspondingly slow-but-steady stock that increases at a predictable rate over time. Investors generally want to know that they won’t be wiped out by short-term movements in investor sentiment, generally preferring those companies that offer reasonable growth coupled with some sort of expectation of stability. With that in mind, an investment in a highly volatile sector such as fuel cell technology may be too risky for those with a more conservative investing profile. To that I say, invest accordingly.
Recent news of a report by SpruceĀ Point Capital Management LLC titled “Fuel SELL Opportunity,” which has garnered significant coverage, has prompted the majority of the volatility related to Ballard’s share price. A corresponding bump related to the response of Ballard’s management team has been duly covered by fellow Fool contributor Joseph Solitro.
Where this stock goes is anybody’s guess, although given the highly volatile nature of this stock and the similarity of Ballard’s technology and that of other highly volatile emerging Canadian sectors, we may be witnessing the beginning of an amazing roller coaster ride.
Stay Foolish, my friends.
