Cleantech power-plant builder FuelCell Energy
I told you three months ago to keep your hands off this stock until the company got closer to profitable operations. Looking at a stock chart since that day, you might conclude that I was wrong, because the trend has been positive. But yesterday's trading once again revealed the high risk involved in this investment. That's why I still wouldn't advise buying FuelCell shares yet.
For another reminder, consider that the share price is down 60% so far in 2010, and 80% over five years. This stock has destroyed a lot of value over the years -- and it might not be done.
In the just-reported fourth quarter, $19.7 million of revenue led to a net loss of $12.9 million. Ouch. The product-to-cost ratio FuelCell likes to report is coming down a bit, but still remains at 1.21. That's a nicer way of saying that gross margins are negative.
If your heart is set on green energy investments, you might sleep better at night with a profitable company like FuelTech
All that said, you could certainly buy FuelCell shares in the hopes of a massive rebound from years of negative returns. Just remember that you'd be gambling with cold, hard cash -- and gambling is not investing.