Why Shares of Ballard Power Systems Inc. Popped 15% Today

By Markets Fool.com

Continue Reading Below

Image source: Getty Images.

What happened

Shares of fuel-cell company Ballard Power Systems Inc. (NASDAQ: BLDP) saw shares shoot as much as 14.5% higher on Monday, settling in with a 12.9% gain at 3:30 p.m. EDT.

So what

Late last week, Ballard Power Systems announced that 12 fuel-cell-powered buses had hit the streets in Guangdong, China. This is part of a planned deployment of 300 fuel-cell buses in China, in an effort to demonstrate fuel-cell technology for public transportation.

Continue Reading Below

This is part of Ballard's goal of bringing fuel-cell technology to new customers around the world. The company localized design of fuel-cell modules for the buses in China, and is partnering with local companies to manufacture product there.

Now what

China has been a leader in pushing alternative-fuel technologies like fuel cells, so it's important for Ballard Power Systems to play a leading role. What's key about the bus program isn't necessarily the revenue from the current partnership, but rather the demonstration of the technology's capabilities and the buildout of infrastructure for more vehicles. That could help grow adoption of fuel-cell vehicles in China and elsewhere around the world.

For now, there are more questions about Ballard Power Systems' ability to make money than about its technology, and money is where investors should be focusing. I think the China news is an incremental positive, but until the company demonstrates it can make money sustainably, this is a high-risk stock for investors and is worth being cautious about.

A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.

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.