June 20, 2008
Knobias Clip Report (06-19-2008)
By admin
Submitted By Knobias ClipReport
HYGS: Hydrogen Names Still in Focus; Shares Gain 15.5%
Thursday’s session saw oil decline as China announced the cutting of their subsidies on the commodity leaving much of the higher prices increases on the China consumer. Saudi Arabia also announced a supply increase of 200 thousand barrels a day. The reports erased early market losses but still was hampered by the financials which didn’t join the mid day reversal. Citigroup forecast for substantial write downs and higher credit costs and a less than expected decline in the jobless claims were the main factors.
In the small cap space, Evergreen Solar (ESLR) reported extremely large contract announcements. The two new long-term sales contracts were valued at approximately $600 million. One was with United States-based groSolar while the other was with German-based Wagner & Co Solartechnik GmbH. The contracts extend through 2012 and bring the Company’s total contractual backlog to approximately $1.7 billion. Following the news, shares gained over 19% on heavy buying even with the decline in oil on Thursday.
Another alternate energy name saw some increased attention on Thursday. As has been noted, Honda announced the limited release of the Clarity hydrogen powered car. The announcement has many hydrogen related names on the rise. Hydrogen Hybrid Technology (HYHY) saw another 13% tacked on to its market cap. Hydrogenics, Corp (HYGS) saw their shares gain over 15.5% on heavy volume.
Hydrogenics is a developer and provider of hydrogen generation and fuel cell products and services, serving the growing industrial and clean energy markets. Based in Ontario with operations in Europe and Asia as well, the Company has its hand in many projects relating to green energy.
In early May, the Company reported first quarter revenue that was up 56% year over year at $10.7 million. The number gives the Company over $38 million in trailing twelve months. Backlog at the end of March was reported at $29.6 million.
Profitability was achieved in the OnSite Generation business but overall, the loss was $4.3 million for the quarter. However, the loss was an improvement of 48% compared to last year’s first quarter number of $8.3 million.
In late May, the Company reported that it had been selected to provide the hydrogen electrolyzer for a community wind-hydrogen-diesel system in the community of Ramea, Newfoundland and Labrador, Canada. By adding zero-emission hydrogen generation and storage, Newfoundland and Labrador Hydro (Hydro), are anticipating an increase in the amount of electricity derived from wind which will lead to a decreased dependence on diesel fuel. The Company noted that it intended to deliver its commercially proven HySTAT(TM) onsite generation electrolyzer to Hydro within one year.
With the push for alternative sources of energy and the recent buzz for all things hydrogen, the name is certainly one to follow. With more improvements in cost cutting initiatives and increases in margin percentages, investors would be wise to watch.
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