Why FuelCell Energy Inc's Shares Popped 28% in May

By Markets Fool.com

Image source: FuelCell Energy Inc.

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What: Shares of FuelCell Energy Inc jumped 28.4% in May after giving a positive update on its Asian pipeline.

So what: FuelCell Energy said that its pipeline with POSCO Energy in South Korea is currently over 400 MW and the company is constructing a 20 MW fuel cell park that will be sold to Korean Power Exchange. This is all on top of 150 MW of projects POSCO Energy already owns.

Early in the month, FuelCell Energy also announced that it will study technology to reduce the cost of carbon capture with ExxonMobil. The goal is to create a fuel cell that will generate power while consuming carbon dioxide, which could be used at coal or natural gas plants.

Now what: The big concern for FuelCell Energy has never been its potential, it's always been turning that potential into growth and profits. And neither of these announcements do anything to alleviate those questions long-term. While I see these as incremental positives for the company, I would like to see the company grow profits and quit a long history of diluting shareholders with new share offerings. That's how it will create value and improve the stock price on a long-term basis.

The article Why FuelCell Energy Inc's Shares Popped 28% in May originally appeared on Fool.com.

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Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.