Stocks are risky investments because they are constantly under pressure. Economic conditions, geopolitical events, natural disasters, and investor sentiment contribute to market volatility. The chances of making or losing money are equal, and the decision to invest depends on an individual’s appetite for risk.
However, some investors would take their chances on riskier stocks like Ballard Power Systems (TSX: BLDP) and Lithium Americas (TSX: LAC). Both stocks have underperformed thus far in 2024 but could pay off big time in the future.
Numerous growth catalysts
Ballard Power Systems trade at a discount if you’re investing today. At $3.76 per share, the year-to-date loss is 23.42%. The $1.1 billion company develops, manufactures, and sells proton exchange membrane (PEM) fuel cell products for power product markets, material handling, portable power, and backup power.
Growth investors are familiar with this industrial stock owing to its inclusion in the TSX30 List or the flagship program for TSX’s top 30 performers. Ballard was a consistent winner for three years (2019 to 2021) until it dropped from the list due to mounting losses.
In the first quarter (Q1) of 2024, total revenue rose 9% year over year to US$14.5 million, although net loss widened 27% to US$41.1 million compared to Q1 2023. Nonetheless, Ballard’s president and chief executive officer (CEO), Randy MacEwen, said that the company remains on track to becoming a commercial products company.
As of March 31, 2024, the order backlog was US$180.5 million, representing a 38.3% increase from Q4 2023. Management expects revenue to be back-half weighted (30% in the first half and 70% in the second half), similar to 2023. The long-term supply agreement with Solaris Bus & Coach is a growth catalyst.
The landmark agreement with the European bus manufacturer involves the supply of 1,000 hydrogen fuel cell engines through 2027 for the European transit bus market. Furthermore, Ballard recently launched the FCmove-XD, its ninth generation, high-performance fuel cell engine.
Mircea Gradu, Ballard’s chief engineering officer, said, “We are laser-focused on strengthening the economic value proposition for heavy-duty mobility customers.” He added that the latest fuel cell engine has reset the industry standard for PEM fuel cell engine performance.
Ballard also announced a collaboration with Element 1 Corp, a pioneer in on-demand hydrogen generation technology, to accelerate the adoption of sustainable hydrogen energy solutions.
Full capacity in 2028
Lithium Americas developed the Thacker Pass project in Northern Nevada, the resource for sedimentary lithium used to produce battery-quality lithium carbonate. Unfortunately, the basic materials stock languishes in negative territory. At $4.16 per share, it is down 51.06% year to date.
The $903.4 million pure-play North American lithium company intends to power the U.S. lithium-battery supply chain soon. According to management, there is a clear path to production in Thacker Pass. The mine life is 40 years with expansion potential. General Motors is the largest shareholder and offtake partner.
In Q1 2024, net loss rose 253% year over year to US$6 million, although it was expected. The site preparation for major earthworks is complete, and major construction should commence in the second half of 2024. Lithium Americas will extract lithium, run at full capacity in 2028, and eventually produce 80,000 metric tons annually.
Longer wait
Ballard Power Systems and Lithium Americas are potential multi-baggers if you’re patient and chasing greater earnings down the road.
