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Why Blink Charging, Lithium Americas, and Westport Fuel Systems Stocks All Jumped Today

By Rich Smith - Jan 7, 2021 at 5:10PM

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Democrats control the White House and Congress now. Renewable energy investors think that's pretty great news.

What happened

After the Georgia Senate runoff elections, the Democrats will control the White House, the House of Representatives, and the Senate for the next two years.

The green-friendly party's control of two of the three branches of government had investors feeling optimistic about the chances for renewable energy stocks on Thursday. Purveyors of electric car charging networks, alternative fuel systems, and lithium all closed the day up sharply, with Blink Charging ( BLNK -1.43% ) up 6.8%, Westport Fuel Systems ( WPRT 2.70% ) up 7.2%, and Lithium Americas ( LAC 4.05% ) 18.7% higher.

Collage of windmills solar panels and electric lines representing the renewable energy industry

Image source: Getty Images.

So what

And the election results in Georgia are not all the news to report today.

Blink Charging probably had the biggest news, announcing Wednesday after the close of trading that it will capitalize upon its surging stock price (up by 21 times in 12 months) by issuing 5 million new shares of common stock. At Thursday's closing price, the stock sale could raise as much as $220 million in new capital (and possibly more, if an overallotment option is exercised) to fund Blink's continued build-out of its charging network.  

Westport, which develops low-emissions alternative fuels, didn't have anything new to report today, but shares of Lithium Americas got an additional boost from yesterday's midday price-target hike at Canaccord Genuity. As reports today, Canaccord still considers Lithium Americas only a speculative buy. And because the company isn't producing lithium at commercial scale yet, that's perhaps the best Lithium Americas investors could hope for. But at the same time, Canaccord nearly doubled its price target on the stock to 20 Canadian dollars a share.

Now what

And yet a CA$20 price target works out to only $15.76 in American currency. With Lithium Americas stock now trading close to $19 a share on the New York Stock Exchange, I'm not certain that the "buy" part of Canaccord's recommendation still makes sense (although the "speculative" part certainly does).

Nor do I quite get the attraction of Westport, a company that hasn't earned a profit in more than 20 years of doing business, and whose sales declined 27% year over year through the first three quarters of 2020.

For that matter, I suspect eyebrows may be raised pretty high over the fact that Blink Charging, which brought in less than $4.5 million from selling charging services over the past year, is about to make 49 times as much money from selling its own stock.

Just because we know why all these stocks went up today doesn't necessarily mean that the reasons make sense.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. 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.

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Stocks Mentioned

Blink Charging Co. Stock Quote
Blink Charging Co.
$32.44 (-1.43%) $0.47
Westport Fuel Systems Inc. Stock Quote
Westport Fuel Systems Inc.
$2.28 (2.70%) $0.06
Lithium Americas Corp. Stock Quote
Lithium Americas Corp.
$32.66 (4.05%) $1.27

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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