Over the course of the past weeks, hydrogen fuel cell company FuelCell Energy (NASDAQ:FCEL) has been in focus among investors. Last week the FuelCell stock rallied strongly along with some of the other stocks in the hydrogen fuel sector. The good times continued for FuelCell on Monday as the stock rallied by as much as 50. Hence, it could be a good idea for investors to take a closer look at the catalysts that led to these gains.
The most important thing to keep in mind regarding FuelCell is the fact that the company is one of the biggest operators in its industry. Moreover, FuelCell generates power for a wide range of clients through its power plant network named SureSource. That is one of the major reasons behind the rally in the FuelCell stock.
On the other hand, the rally that came about last week was triggered due to optimism among investors with regards to hydrogen fuel. The optimism was sparked after the United Nations announced that it was looking at ways in which the dependence on coal could be phased out.
While the United Nations comment may have been a trigger, there may have been other compelling factors at play as well. Oil prices have been rising steadily and in such a situation hydrogen fuel appears far more attractive. Moreover, investors are also looking for plays in the fuel cell electric vehicles (FCEV) space nowadays.
At this point, the company has not unveiled any plans with regards to its strategy for China. However, investors seem to be optimistic about the prospects of fuel cell companies in light of the outline of a 15-year plan devised by the government of China.
As per the document, the government is looking at ways to increase the usage of clean energy vehicles, and hence, it is not surprising that there is excitement about the deployment of fuel cell energy. The State Council has specifically stated that it is going to focus on creating supply chains meant for fuel cells.
Although there is nothing specific with regards to FuelCell Energy in the document, it clearly indicates that China might go into FCEVs in a big way over the next decade and a half. Even if FuelCell does not operate in China, the company might benefit from any positive knock-on effect it might have on the FCEV space in the United States.
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