Why FuelCell Energy Is Poised to Underperform

Market-lagging returns could be written in this 1-Star.

Brian D. Pacampara, CFA
Brian D. Pacampara, CFA
Feb 12, 2013 at 7:36PM
Energy, Materials, and Utilities

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, fuel-cell power plant manufacturer FuelCell Energy (NASDAQ:FCEL) has received an alarming one-star ranking.

With that in mind, let's take a closer look at FuelCell and see what CAPS investors are saying about the stock right now.

FuelCell facts

  

Headquarters (founded)

Danbury, Conn. (1969)

Market Cap

$212.2 million

Industry

Electrical components and equipment

Trailing-12-Month Revenue

$120.6 million

Management

CEO Arthur Bottone (since 2011)

CFO Michael Bishop (since 2011)

Return on Equity (average, past 3 years)

(63.3%)

Cash/Debt

$57.5 million/$22.6 million

Competitors

Ballard Power Systems (NASDAQ:BLDP)

Cummins (NYSE:CMI)

General Electric (NYSE:GE)

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 48% of the 113 All-Star members who have rated FuelCell believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those bears, fellow Fool Russell Carpenter (TMFEldrehad), succinctly summed up the underperform case for our community:

I've been bearish on fuel cells in general and this company in particular for almost as long as I've been a member of the CAPS community. The infrastructure challenges are simply too steep to make this technology economically viable anytime soon, and companies in this space will never provide much in the way of meaningful returns to their shareholders so long as this fact remains true.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.