2 Industrial Stocks to Avoid or Sell Short Until Further Notice

NASDAQ: PLUG | Plug Power, Inc. News, Ratings, and Charts

PLUG – While demand remained steady, the industrial sector is facing increasing headwinds such as inflation, interest rate hikes, and persistent supply chain disruption. Amid this, we believe fundamentally bleak industrial stocks, Plug Power (PLUG) and FuelCell (FCEL), might be best avoided or sold short. Read on…

Industrial production increased by 0.4% in September and 2.9% at an annual rate in the third quarter. However, the sector is facing headwinds that could hamper growth. The industry is struggling with challenges related to the shifting economic climate, attributed to the stubbornly high inflation and consequent rate hikes.

Moreover, the consistent supply chain issues have been among the biggest disruptions for the past few years. And Russia’s invasion of Ukraine has been intensifying supply chain concerns as economic sanctions against Russia are increasing.

Additionally, the U.S. factory sector is expected to slow in the coming months amid rapidly rising interest rates, a switch in consumer spending to services, and a broad economic slowdown both domestically and in Europe and China.

Hence, we think industrial stocks Plug Power Inc. (PLUG - Get Rating) and FuelCell Energy, Inc. (FCEL - Get Rating) are best avoided or sold short, given their bleak fundamentals.

Plug Power Inc. (PLUG - Get Rating)

PLUG is a leading provider of comprehensive hydrogen fuel cell (HFC) turnkey solutions. The company offers end-to-end clean hydrogen and zero-emissions fuel cell solutions for supply chain and logistics applications, on-road electric vehicles, the stationary power market, and more.

On August 25, PLUG signed a hydrogen supply deal with Amazon (AMZN) to provide liquid green hydrogen starting in 2025 to help Amazon’s commitment to be net-zero carbon by 2040. However, the company is not expected to benefit immediately from this deal.

During the second quarter that ended June 30, 2022, PLUG’s total operating expenses increased 131.9% year-over-year to $114.44 million. The company’s operating loss rose 63.9% from the year-ago value to $146.91 million. Its net loss increased 73.9% year-over-year to $173.30 million, while its loss per share grew 66.7% year-over-year to $0.30.

Street estimates PLUG’s EPS to decline 16.4% year-over-year to negative 0.95 for the fiscal year ending December 2022. Moreover, the company has failed to surpass the consensus revenue estimates in three of the trailing four quarters.

Over the past year, PLUG has plunged 41.4% to close the last trading session at $19.11. The stock has declined 32.4% over the past month.

PLUG’s POWR Ratings are consistent with this bleak outlook. The stock has an overall rating of F, which translates to a Strong Sell in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It has an F grade for Stability, Sentiment, and Quality and a D for Growth and Value. It is ranked #89 of 90 stocks in the Industrial – Equipment industry.

To see PLUG’s POWR Rating for Momentum, click here.

FuelCell Energy, Inc. (FCEL - Get Rating)

FCEL develops, manufactures, produces, constructs, and services high-temperature fuel cells for clean electric power generation. The company offers solutions for various applications, such as on-site power generation, combined heat and power, carbon capture, and hydrogen-based storage. It serves commercial enterprises, utilities, hospitals, and governments.

For the fiscal 2022 third quarter ended July 31, 2022, FCEL’S loss from operations increased 164.5% year-over-year to $28 million. Its adjusted EBITDA loss rose 301.5% year-over-year to $20.77 million. The company’s net loss, attributable to common stockholders, widened 136.1% year-over-year to $30.21 million. Its net loss per share grew 100% from the year-ago value to $0.08.

FCEL’s consensus EPS estimate of negative $0.33 for the fiscal year ending October indicates a decline of 7.5% from the same period last year.

FCEL slumped 64.5% over the past year to close its last trading session at $3.1. The stock has declined 34.4% year-to-date.

FCEL’s POWR Ratings reflect its poor prospects. The stock has an overall F rating, equating to a Strong Sell in our proprietary rating system.

FCEL has a grade of F for Stability, Sentiment, and Quality and a D for Value. It is ranked #86 in the same industry.

Beyond what we’ve stated above, we have also given FCEL grades for Growth and Momentum. Get all FCEL ratings here.

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


PLUG shares were trading at $17.92 per share on Wednesday morning, down $1.19 (-6.23%). Year-to-date, PLUG has declined -36.52%, versus a -21.28% rise in the benchmark S&P 500 index during the same period.


About the Author: Kritika Sarmah


Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
PLUGGet RatingGet RatingGet Rating
FCELGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Stock Market Update: It’s Complicated!

The S&P 500 (SPY) may have bounced 17% from recent lows, but the outlook for stocks from here is...in a word...COMPLICATED. Read on to get Steve Reitmeister full market outlook and trading plan for this complicated market environment.

Becoming More Bullish on Stocks, But...

Stocks are on a roll with the S&P 500 (SPY) up more than 10% from the recent lows. Before you start getting too giddy, you should read this updated market outlook and trading plan Steve Reitmeister.

Stock Market Held Hostage

Uncertainty is the term most often applied to this stock market. Uncertainty over tariffs. Uncertainty of whether the S&P 500 (SPY) will fall into bear territory. Uncertainty over what happens next. Steve Reitmeister dives into the uncertainty to make sense of the market in this week’s commentary...

Stock Market Standing on the 50 Yard Line

Steve Reitmeister contemplates where the stock market stands now and what happens next in trying to stay on the right side of the market action. One path points to bear and one to new highs for the S&P 500 (SPY). Which will it be?

Bear or Bull Market?

The S&P 500 is on the brink of bear market territory...but that outcome is not a given at this time. Steve Reitmeister shares insights gleaned from his 45 years of investing to shine a light on current conditions along with his top picks...

Read More Stories

More Plug Power, Inc. (PLUG) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All PLUG News