This article is part of the series

Payne's Picks

A Stock Play to Help You Sleep at Night

By Payne's PicksFOXBusiness

Could Plug Power be the jolt your portfolio needs?

Continue Reading Below

Could Plug Power be the jolt your portfolio needs?

FBN’s Charles Payne, retail analyst Hitha Prabhakar and Penn Financial Group founder Matt McCall on the outlook for Plug Power.

Let’s take a look at Plug Power (NASDAQ:PLUG).

If you watch the FOX Business Network, you probably have heard me talk about this one a lot, particularly on Varney & Co

News came out this week that China would make 30% of all its new government vehicles electric – well, that sparked even more excitement in this space.

Continue Reading Below

Also this week, FBR Capital Markets started covering the stock with an "outperform" rating and a price target of $8. I've always liked the stock. It's a classic momentum name, and in part because of the limited coverage by larger Wall Street firms.

Last year, the ball got rolling in May with a million-dollar backlog. Then, from May to October, another $11 million -- and from October to December another $17.8 million. Most of these contracts cover five years, and now management can boast of major food companies including Sysco (NYSE:SYY) and Kroger (NYSE:KR), retailers including Walmart (NYSE:WMT) and Lowes (NYSE:LOW) and automakers including Mercedes and BMW, whose Spartanburg, South Carolina plant has more than 300 fuel-cell vehicles. 


More On This...

    Is W. R. Berkley the defensive stock your portfolio needs?


    The stock should remain volatile, but I agree it could be an $8.00 stock sooner than later.

    And now let’s look at W.R. Berkley Corporation (NYSE:WRB).

    It is a defensive play, but long term this thing has been a juggernaut. 

    It’s really not well known, but this commercial property casualty insurance company has been around since 1967, when a couple of buddies at Harvard through-in together $2,500. The return on equity from 2003 to June of this year has crushed all of its larger, better-known rivals.

    The company operates in three segments: domestic insurance, international insurance and global reinsurance.

    It's a very well-run business that over the years, when the industry got hit really hard by catastrophe, saw no loss -- and sometimes even had a surplus.

    For example, after Super Storm Sandy the industry lost on average 4.3%, while W.R. Berkley had a surplus of almost 1%.

    Katrina - the industry lost 13.8% -- WRB saw a surplus of almost 1%.

    That execution, in fact, has gotten even better. There have really been no major casualties or calamities recently, so it’s helped a lot. 

    In the past four quarters, management posted results that beat the Street by 3%, 4%, 10% -- and more recently 27%. Consequently, fiscal year 2015 consensus has climbed, now the Street is looking for $3.87, a couple of months ago it was $3.57.

    You want to sleep at night?  You’re a little worried about volatility? This stock is changing hands at one times book, and less than 1 times sales, and PE ratio of just 12.

    Management recently hiked the annual dividend, so now you’re going to get paid $0.44 to hide out, if that’s what you’re going to do. But if history is any indication,  you could also get paid big time with this if you have some patience.

    DISCLOSURES

    Plug Power (NASDAQ:PLUG)

    Owns

    Family Owns

    Firm Owns

    Investment
    Banking

    CHARLESNNYN
    HITHANNNN
    TRACYNNNN
    MATTNNNN
    KATENNNN

    W.R. Berkley Corporation (NYSE:WRB)

    Owns

    Family Owns

    Firm Owns

    Investment
    Banking

    CHARLESNNYN
    HITHANNNN
    TRACYNNNN
    MATTNNNN
    KATENNNN

    Continue Reading Below

    What do you think?

    Click the button below to comment on this article.