Why Ballard Systems (TSX:BLDP) Stock Price Has Risen 61% in January So Far

Ballard Power Systems Inc.’s (TSX:BLD)(NASDAQ:BLDP) stock price continues to rally off the increasing realization that of the hydrogen fuel cell is an exciting industry disrupting technology.

| More on:
data analytics, chart and graph icons with female hands typing on laptop in background

Image source: Getty Images

Yes, you read the headline right. Ballard Power Systems (TSX:BLDP)(NASDAQ:BLDP) has risen 61% in January so far. That’s just 17 days! While it may seem like this is right out of left field, coming out of nowhere, the conditions for a Ballard Power stock price rally have actually been building quietly behind the scenes for a while now.

Let’s take a look at why Ballard Power Systems stock price is rallying so strong in January.

Fuel cells are in the spotlight as momentum builds

As I have written about in previous articles, fuel cells stand out as a leading option for the electrification of vehicles. In January, this fact has been getting more attention as the world races toward cleaner energy and cleaner fuel sources.

In a joint white paper that was released in early January by consulting firm Deloitte in conjunction with Ballard, hydrogen fuel cells were given flying colours. The analysis concluded that “fuel cell electric vehicles are projected to be less expensive to run than battery electric and internal combustion engine vehicles within 10 years.”

It is a bold projection, but based on how quickly costs have been coming down in recent years, the projection is that “the total cost of ownership for commercial vehicles will fall by more than 50% in the next 10 years.”

This white paper is just the first one in a planned series of papers that will explore how hydrogen fuel cells are set to power the vehicles of the future.

The contracts keep piling up for Ballard

Coming off of a strong 2019, Ballard kicked off 2020 with another significant order, this time for its fuel cell stacks that will support backup power systems at German radio towers. The order is for 500 fuel cell stacks through 2021 with the potential for up to 1,500 in additional orders. This is yet another testament to the growing recognition of the value of fuel cells and of Ballard specifically.

Ballard stock price finally getting the recognition it deserves

The run-up in Ballard Power Systems stock price has been dramatic, not only in January but also in the last year. So, with the one-year return on the stock being north of 250%, investors may be tempted to take profits. I should note that I am in the camp of taking profits when stock prices have gotten ahead of themselves, but with Ballard today, I see even stronger gains coming. Ballard’s fuels cells are disrupting a massive, multi-billion-dollar industry, and we are just at the beginning of this exciting disruption.

Foolish bottom line

Ballard stock price has long suffered from the disaster in the early 2000s, when it got way ahead of itself in the tech bubble and proceeded to plummet from close to $200 a share to almost worthless. But this was back when it was purely a concept company — an exciting concept, but not one that was anywhere close to becoming a real business.

In contrast, today, Ballard is close to becoming a real, thriving business that is changing the world and making real money for its shareholders.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Karen Thomas owns shares of BALLARD POWER.

More on Investing