Value investors could realize superior returns in one year or less by taking positions in a pair of industrial stocks today. Ballard Power Systems (TSX:BLDP)(NASDAQ:BLDP) and Bombardier Inc. (TSX:BBD.B) were among the top advancers in the strong, double-digit finish of the TSX on February 4, 2022.
Market analysts covering the stocks are likewise bullish because the respective businesses are rebounding. Their average price forecasts indicate that both could rise exponentially in 12 months. Ballard Power Systems, a three-time TSX30 winner, is a no-brainer buy. Meanwhile, Bombardier remains a solid performer with its 167.19% trailing one-year price return.
TSX 30 winner
Ballard is one of only four companies that made the TSX30 List in all the years of the young flagship program. It joins Shopify, Wesdome Gold Mines, and Cargojet. All are growth stocks with significant dividend-adjusted share price performances from 2019 to 2021.
This $3.69 billion company is known globally as the manufacturer and seller of proton exchange membrane (PEM) fuel cell products. Besides the clean energy fuel cell solutions, Ballard provides material handling and engineering services.
Ballard’s vision is to deliver fuel cell power for a sustainable planet. Management fervently hopes zero emission fuel cell vehicles will positively change the lives of the next generation. The company builds shareholder value through the sale and service of power products and the delivery of technology solutions.
On February 1, 2022, the company announced the successful test of a power cell powered by liquid hydrogen. Ballard and Chart Industries are the joint developers of the heavy-duty hydrogen fuel system. Expect the partners to build upon the success and to identify applications. Liquid hydrogen has the potential to unlock long-distance opportunities like trucks, coach buses, off-road vehicles, rail, and marine.
Performance-wise, Ballard’s total return in the last 3.01 years is 175.17% (39.96% CAGR). Analysts see a return potential between 117.7% and 165.8%. The current share price of $12.41 could climb to $27.02 (average) or as high as $32.98 within a year.
Big boost in February
December 2, 2021, was a milestone and the day Bombardier delivered its 1,000th global aircraft. The recipient of the Global 7500 business jet was NetJets. Notably, the said aircraft boasts the first Environmental Product Declaration (EDP) for a business jet.
Apart from manufacturing business aircraft and private jets, the $4.18 billion company has a global network of service centres. Management has yet to report its full-year 2021 results, although business jet revenues increased 17% in Q3 2021 versus Q3 2020. Bombardier’s President and CEO, Eric Martel, also notes the positive reception to the recently launched Challenger 3500.
On February 4, 2022, Quebec announced that it would invest an additional US$300 million in the Airbus A220 aircraft. The provincial government will maintain a 25% stake in the old C Series commercial jet program. It will also provide at least 2,500 full-time jobs. Market analysts see a potential price appreciation from $1.71 to $2.99 (+74.9%).
Ballard Power Systems and Bombardier appear undervalued vis-à-vis their business outlooks. This month, value investors could consider including one or both in their buy lists. The breakouts are imminent as the stocks seek their intrinsic or real values.