Two Top Canadian Hydrogen Stocks to Buy in September 2023 – Loans for Stock in Canada

By
On September 28, 2023
Tags:

Renewable energy is the future, that much is clear. What is less clear, is when the world will be able to fully transition away from fossil fuels. If we are being realistic, we are decades away from the full transition to renewable sources.

That makes investing in renewable energy companies and renewable infrastructure a tricky proposition. The euphoria that followed the clean technologies industry between November of 2020 and the start of 2021 has all but evaporated.

The clean energy sector has dropped materially along with some other popular Canadian stocks, and investors are possibly beginning to question their previous investments.

While valuations certainly were stretched, it is important to remember that investing in the renewable energy industry is a long-term game. In particular, those invested in the top Canadian hydrogen stocks, or considering investing in them, must have a very long-term view.

Hydrogen and Canadian hydrogen stocks have been all over the news

Governments around the world are establishing lofty hydrogen strategies. On their way to reducing greenhouse gas emissions and hitting net-zero emissions, they view hydrogen as a key resource in combating climate change. Even Canada has launched its own Hydrogen Strategy to help in reducing carbon emissions.

Others that have announced hydrogen strategies include Japan, South Korea, Australia, New Zealand, Germany, France, Portugal, and the Netherlands, among others.

This is all well and good but the current reality is that hydrogen is far from becoming a viable commercial alternative to fossil fuels. There is much work to be done. From distribution and storage to transportation and consumption, the technology to adopt hydrogen is in its early stages.

We are still many years away from having a true end-to-end hydrogen supply chain

That is the bad news.

The good news? Investment in things like hydrogen production is ramping up in a big way. As mentioned, governments have made it publicly known that they intend to invest in the hydrogen industry.

In Canada, the industry is estimated to create upwards of $50B in revenue per year and create 350,000 jobs by 2050. Internationally, demand is expected to reach $2.5 trillion by 2050.

There is no question mass potential for the industry exists. As mentioned however, it will all come down to how the technology progresses.

Which brings me to how Canadian investors can take advantage of this global shift. Lets have a look at the best hydrogen stocks to buy today.

Of note, with this being a relatively young industry, there are not a large number of companies that are publicly traded. So, we’ll list the top 2. If you head south to the US markets, you’ll find larger players like Plug Power, Air Products, and Bloom Energy.

Of note, we used to have 3 companies on this list. However, Xebec Adsorption has had some significant issues that resulted in it being removed from the list. We’ll speak more on it later.

The top Canadian hydrogen stocks to look at right now

Ballard Power (TSE:BLDP)Loop Energy (TSE:LPEN)

Ballard Power (TSE:BLDP)

At the heart of a viable shift to hydrogen is innovative hydrogen fuel cell technology, directed at creating more zero-emission vehicles. In Canada, there are a couple of options for investors to consider when looking at hydrogen fuel cells.

The most well-known is Ballard Power (TSX:BLDP). The company is one of the leading hydrogen fuel cell companies with a market capitalization of just under $2.1B at the time of writing.

It has shipped over 850MW of (Polymer Electrolyte Membrane) PEM fuel cell products and counts many major auto manufacturers as strategic partners.

It is important to note that Ballard has a commercially viable product. However, as with any new technology the adoption has been slow as the company is focused on areas where fuel cell technology has a clear advantage. Today, that is in the heavy commercial space.

Thus far, it has powered 1,400 transit buses, 2,200 trucks, and has 23 trains, and 8 ship projects in development.

Ballard is largely considered one of the world’s best fuel cell companies with leading technology and proven use cases, especially when it comes to green hydrogen production. Unfortunately, the stock has been anything but a leader. In the early 2000s, the company’s share price soared before crashing down to earth and effectively did nothing for a decade.

As interest in the hydrogen industry reached a fever pitch, Ballard’s share price soared to multi-year highs in early 2021. Then the bottom fell out. As of right now, Ballard is trading more than 82% below its all-time highs witnessed in early 2021.

The loss in value is not all that surprising. Ballard was trading at extreme valuations and was benefiting from the market euphoria. We advised Stocktrades Premium members a few times to be cautious with Ballard. While the underlying technology is sound, the stock price got way ahead of itself.

Even at today’s prices, investors should exercise caution. We are still very much in the early days of the industry and trading at 19 times sales, Ballard is still extremely expensive.

The company is not expected to become profitable for some time and analysts are expecting annual revenue growth in the 50% range through the next few years. While this is a healthy growth rate, Ballard has a mixed history of meeting estimates.

Loop Energy (TSE:LPEN)

Shifting gears from one of the most widely known, to likely one of the least known. Loop Energy (TSX:LPEN) is a relatively new company in terms of the stock market, having only gone public on February 25, 2021. Loop designs PEM fuel cell systems targeted for the electrification of commercial vehicles.

The demand for its IPO was quite strong and it priced at the top end of expectations – $16.00 per share and it touched a high of $17.44 on its first day of trading. 

Fortunately for management, the IPO’s was at peak investor demand for Canadian hydrogen stocks. Unfortunately for investors, those who bought in the early stages of its listing are likely sitting on big losses.

Since its IPO, Loop Energy’s stock price has cratered and it has lost over 90% of its value.

While the downtrend is unnerving, it is a result of negative industry sentiment. This has nothing to do with the company‘s performance or its products. In fact, we quite liked the company when it launched its IPO as it was much more attractively valued than the competition. As mentioned, however, the markets soured on the industry, and valuations cratered across the board.

Much like Ballard, it is focused first and foremost on commercial applications including light commercial vehicles, transit buses, medium and heavy-duty trucks, marine, train, mining trucks, material handling vehicles, and stationary power.

Unlike Ballard, Loop Energy is a pre-revenue stage company. It has only begun marketing its products and expects to exit 2023 with $13M in sales – up from only $353K in 2020. It believes it can achieve a long-term CAGR of approximately 40% through 2030. That is an impressive growth trajectory.

Whether it can achieve this level of growth remains to be seen and as a newly listed company, management has not yet demonstrated its ability to execute. The good news is that the company is successfully growing the backlog.

Analysts seem to be on board and are calling for 100%+ average revenue growth through 2023. Assuming the company hits revenue estimates, Loop is only trading at ~3 times forward sales. In comparison, Ballard is trading at ~11 times forward sales. Much like it was at IPO, there is no question that Loop Energy is cheap by comparison.

What makes Loop particularly attractive is that it is backed by Cummins, a $34B global industrial giant. This strategic partnership will enable Loop easier entry into a multitude of markets.

While the potential looks attractive, Loop Energy is likely to be even more volatile than Ballard. It is a newly listed company and Loop will be under greater scrutiny than its more established competitor. Well executed business by the company, and Loop suddenly looks like a bargain at these prices. On the flip side, if it struggles to meet expectations then investors are likely going to require considerable patience.

An update on Xebec Adsorption (TSE:XBC) and its bankruptcy

Xebec was a global provider of gas generation, purification and filtration solutions for the industrial, energy, and renewables marketplace. It used well-positioned in the energy transition space with proprietary technologies that transform raw gases into clean sources of renewable energy.

Xebec was flying high until the company ran into some financial accounting errors that caused investor confidence to collapse.

Ss a result, the company traded more than 80% off of its all time highs. It got even worse in late 2022, when the company filed for bankruptcy protection. We left Xebec on this list not as a top hydrogen stock to buy, but more so to highlight the risks of investing in these types of companies.

In 2020/2021, it seemed like stocks could never go down. But as they say, a rising tide lifts all ships. It will be interesting to see how the bankruptcy proceedings go and if Xebec will come out of this and begin trading again.

But for now, use it as an example of how risky small and micro-cap growth stocks are, especially in up-and-coming industries.

Overall, these are 2 strong Canadian hydrogen stocks to add to your radar today, but are not without risk

Bottom line, Ballard and Loop Energy are well positioned to be leading fuel cell companies but in the short term, their fortunes are likely going to be tied to market sentiment.

Long-term, their success will be dependent on further innovations and the wide-spread adoption of hydrogen as an alternative source of energy.

A purchase of either of these companies right now comes with a high amount of risk. So, make sure investing in the hydrogen economy fits the mold of your portfolio and you as an investor.

———

Global Securities Lenders specializes in custom liquidity solutions for those seeking to leverage concentrated market positions quickly, conveniently, and confidentially. We provide flexible terms and low interest rates specifically designed with your goals in mind. GSL recently announced our goal of working in Canada to provide securities lending to companies and high net worth individuals.

Securities-based lending, or a stock loan, is the practice of using market investments such as stocks, ETF’s, warrants, bonds, or real estate investment trusts as collateral for a loan. If you own free-trading, non-restricted stock on a major world exchange that trades at a minimum volume of $30,000 USD daily, you can qualify for a non-recourse, collateralized stock loan from one of our valued lenders in record time! Get an instant quote to see if you qualify.

Original Article: Read More

Original Source: Stocktrades

Categories: Top Canadian Stocks, Ballard Power | TSE:BLDP, Loop Energy | TSE:LPEN

Let's Start a Conversation

Instant Quote

Please fill out your information to see if you are pre-qualified.

Enter the Stock Symbol.

Select the Exchange.

Please enter your First Name.

Please enter your Last Name.

Please enter your phone number.

Please enter your Email Address.

Please enter or select the Total Number of Shares you own.

Please enter or select the Desired Loan Amount you are seeking.

Please select if you are an Officer/Director.

Global Securities Lenders, LLC may only offer certain information to persons who are “Accredited Investors” and/or “Qualified Clients” as those terms are defined under applicable Federal Securities Laws. In order to be an “Accredited Investor” and/or a “Qualified Client”, you must meet the criteria identified in ONE OR MORE of the following categories/paragraphs numbered 1-20 below.

Global Securities Lenders, LLC cannot provide you with any information regarding its Loan Programs or Investment Products unless you meet one or more of the following criteria. Furthermore, Foreign nationals who may be exempt from qualifying as a U.S. Accredited Investor are still required to meet the established criteria, in accordance with Global Securities Lenders, LLC’s internal lending policies. Global Securities Lenders, LLC will not provide information or lend to any individual and/or entity that does not meet one or more of the following criteria:

1) Individual with Net Worth in excess of $1.0 million. A natural person (not an entity) whose net worth, or joint net worth with his or her spouse, at the time of purchase exceeds $1,000,000 USD. (In calculating net worth, you may include your equity in personal property and real estate, including your principal residence, cash, short-term investments, stock and securities. Your inclusion of equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.)

2) Individual with $200,000 individual Annual Income. A natural person (not an entity) who had individual income of more than $200,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

3) Individual with $300,000 Joint Annual Income. A natural person (not an entity) who had joint income with his or her spouse in excess of $300,000 in each of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year.

4) Corporations or Partnerships. A corporation, partnership, or similar entity that has in excess of $5 million of assets and was not formed for the specific purpose of acquiring an interest in the Corporation or Partnership.

5) Revocable Trust. A trust that is revocable by its grantors and each of whose grantors is an Accredited Investor as defined in one or more of the other categories/paragraphs numbered herein.

6) Irrevocable Trust. A trust (other than an ERISA plan) that (a)is not revocable by its grantors, (b) has in excess of $5 million of assets, (c) was not formed for the specific purpose of acquiring an interest, and (d) is directed by a person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of an investment in the Trust.

7) IRA or Similar Benefit Plan. An IRA, Keogh or similar benefit plan that covers only a single natural person who is an Accredited Investor, as defined in one or more of the other categories/paragraphs numbered herein.

8) Participant-Directed Employee Benefit Plan Account. A participant-directed employee benefit plan investing at the direction of, and for the account of, a participant who is an Accredited Investor, as that term is defined in one or more of the other categories/paragraphs numbered herein.

9) Other ERISA Plan. An employee benefit plan within the meaning of Title I of the ERISA Act other than a participant-directed plan with total assets in excess of $5 million or for which investment decisions (including the decision to purchase an interest) are made by a bank, registered investment adviser, savings and loan association, or insurance company.

10) Government Benefit Plan. A plan established and maintained by a state, municipality, or any agency of a state or municipality, for the benefit of its employees, with total assets in excess of $5 million.

11) Non-Profit Entity. An organization described in Section 501(c)(3) of the Internal Revenue Code, as amended, with total assets in excess of $5 million (including endowment, annuity and life income funds), as shown by the organization’s most recent audited financial statements.

12) A bank, as defined in Section 3(a)(2) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

13) A savings and loan association or similar institution, as defined in Section 3(a)(5)(A) of the Securities Act (whether acting for its own account or in a fiduciary capacity).

14) A broker-dealer registered under the Exchange Act.

15) An insurance company, as defined in Section 2(13) of the Securities Act.

16) A “business development company,” as defined in Section 2(a)(48) of the Investment Company Act.

17) A small business investment company licensed under Section 301 (c) or (d) of the Small Business Investment Act of 1958.

18) A “private business development company” as defined in Section 202(a)(22) of the Advisers Act.

19) Executive Officer or Director. A natural person who is an executive officer, director or general partner of the Partnership or the General Partner, and is an Accredited Investor as that term is defined in one or more of the categories/paragraphs numbered herein.

20) Entity Owned Entirely By Accredited Investors. A corporation, partnership, private investment company or similar entity each of whose equity owners is a natural person who is an Accredited Investor, as that term is defined in one or more of the categories/paragraphs numbered herein.

Please read the notice above and check the box below to continue.

Contact GSL

Please use our Instant Quote form to see if you're pre-qualified for a non-recourse stock loan, or if you have any questions or feedback, please email, call or chat with us.

+1 (954) 648-5454
2805 E Oakland Park Blvd #307, Fort Lauderdale, FL 33308 USA
Open 24 hours a day / 7 days a week / 365 days a year

Frequently Asked Questions

What Is Securities-Based Lending?

Securities-based lending, or a stock loan, is the practice of using market investments such as stocks, ETF’s, warrants, bonds, or real estate investment trusts as collateral for a loan.

How much money can I get for my securities?

Borrow up to 70% of the value of your pledged investments giving you the capital you need to expand your business, purchase real estate, or tackle a costly project.

What happens if my securities lose value?

With a non-recourse stock loan, you can walk away from your securities at any time and keep the loan money with no negative credit consequences even if the investments lose value.

Is my information safe with GSL?

We pride ourselves on outstanding service and make client confidentiality our top priority. You can always be absolutely certain your information is safe with us.

How long does it take for the disbursement of funds?

Most of the transactions we process take less than 7 days from application to the disbursement of funds giving you cash quickly when you need it most.

What credit score do I need to qualify?

There are no credit checks or personal guarantees necessary with our services. Your pledged securities are the only collateral required for the loan you receive.

Contact Us

Florida Office

2805 E Oakland Park Blvd #307
Fort Lauderdale, FL 33308

Call Us

+1 (954) 648-5454‬

Market Coverage