Why FuelCell Energy Inc. Flew Higher on Friday

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of FuelCell Energy popped 17% today after the fuel-cell power plant company received a $2.8 million continuation of an award from the U.S. Department of Energy's Advanced Manufacturing Office.

So what: The stock has soared in 2014 on optimism over growing fuel cell adoption, and today's news only reinforces those good vibes. So while the $2.8 contract amount is a relatively tiny sum, FuelCell will be able to "showcase" the tri-generation capabilities of its Direct FuelCell power plant for industrial applications, prompting investors to pile in on the expectation of even bigger deals ahead.


Now what: Management expects the plant to be operational by the close of 2014. "In addition to offering ultra-clean electricity and usable high quality heat, this fuel cell installation will provide reliable on-site hydrogen production that has the potential to reduce costs associated with purchasing, transporting and storing hydrogen," said President and CEO Chip Bottone in a press release. "We estimate a potential market size of $1.6 billion for our tri-generation DFC-H2 fuel cell power plants serving the industrial and mobility markets in the United States alone." Of course, given FuelCell's still-speculative nature and fiery-hot share price -- up about 150% in just the past month alone -- I'd wait for a much wider margin of safety before buying into that potential.

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The article Why FuelCell Energy Inc. Flew Higher on Friday originally appeared on Fool.com.

Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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