FUELCELL ENERGY NDQ-FCEL
TIMELINESS
SAFETY
TECHNICAL
4
5
2
High:
Low:
New 12/25/15
243.7
86.0
RECENT
PRICE
147.1
84.6
180.1
71.7
157.7
70.1
NMF RELATIVE
DIV’D
Median: NMF) P/E RATIO NMF YLD
5.54 P/ERATIONMF(Trailing:
124.5
27.0
65.7
23.8
48.3
11.8
28.9
9.6
23.4
10.0
22.7
10.1
56.9
15.6
Nil
19.1
5.5
Target Price Range
2018 2019 2020
LEGENDS
. . . . Relative Price Strength
1-for-12 rev split 12/15
Options: Yes
Shaded area indicates recession
Lowered 9/30/11
New 12/25/15
BETA 1.50 (1.00 = Market)
VALUE
LINE
80
60
50
40
30
25
20
15
2018-20 PROJECTIONS
Ann’l Total
Price
Gain
Return
High
25 (+350%) 46%
Low
13 (+135%) 24%
Insider Decisions
to Buy
Options
to Sell
J
0
0
0
F
0
0
0
M
0
0
0
A
0
0
0
M
0
0
0
J
1
0
0
J
0
0
0
A
0
0
0
S
0
0
0
% TOT. RETURN 11/15
Institutional Decisions
to Buy
to Sell
Hld’s(000)
1Q2015
54
40
5208
2Q2015
55
32
6042
3Q2015
45
50
5649
Percent
shares
traded
90
60
30
1 yr.
3 yr.
5 yr.
THIS
STOCK
VL ARITH.*
INDEX
-48.3
0.5
-23.5
-2.0
48.1
71.2
10
7.5
FuelCell Energy was founded as Energy 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 © VALUE LINE PUB. LLC 18-20
Research Corporation in 1969. It went pub- 7.52 7.52 8.50 17.58 12.52 7.42 10.55 7.64 11.48 7.54 6.28 5.85 Revenues per sh A
7.45
lic on June 25, 1992, when the company d16.63 d16.87 d11.05 d15.95 d9.52 d5.52 d3.98 d2.40 d2.05 d1.54 d2.15 d.75 ‘‘Cash Flow’’ per sh
1.35
sold 800,000 shares to the public at $9 a d18.37 d19.81 d13.93 d16.93 d11.88 d7.56 d3.96 d2.76 d2.40 d2.04 d2.18 d.95 Earnings per sh A
1.15
share. The offering was underwritten by
-----------Nil Div’ds Decl’d per sh
Nil
Reich & Co. and Loeb Partners Corp. On 3.48 2.55
.78
1.29
.37
.26
.29
.28
.40
.30
.25
.20 Cap’l Spending per sh
.25
February 22, 1999, FCEL spun-off its Ever- 56.92 22.77 23.63 8.21 4.46
.82 d1.24
.92
5.70
d.81
4.12
3.67
4.50 Book Value per sh B
cel subsidiary, a maker of rechargeable bat- 4.04 4.43 5.67 5.73 7.03 9.41 11.62 15.78 16.35 23.92 25.96 30.00 Common Shs Outst’g C 35.00
teries for scooters, to shareholders.
-----------Avg Ann’l P/E Ratio
16.0
CAPITAL STRUCTURE as of 10/31/15
Total Debt $20.4 mill. Due in 5 Yrs $5.2 mill.
LT Debt $13.0 mill.
LT Interest $0.7 mill.
(12% of Cap’l)
Leases, Uncapitalized: Annual rentals $2.0 mill.
No Defined Benefit Pension Plan
Pfd Stock $59.9 million Pfd. Div’d $3.2 mill.
64,020 shs. of 5% Series B Cumulative pfd.
Each is convertible into 85.106 shares of common
Common Stock 25,964,710 shares
MARKET CAP: $150 million (Small Cap)
CURRENT POSITION 2013
2014 10/31/15
($MILL.)
Cash Assets
57.5
67.7
58.9
Receivables
36.0
49.1
60.8
Inventory
47.7
56.2
65.8
Other
4.7
16.3
18.4
Current Assets
145.9
189.3
203.9
Accts Payable
12.3
24.5
15.7
Debt Due
5.2
6.9
7.4
Other
67.4
74.9
51.8
Current Liab.
84.9
106.3
74.9
ANNUAL RATES Past
of change (per sh) 10 Yrs.
Revenues
-1.5%
‘‘Cash Flow’’
-Earnings
-Dividends
-Book Value
-32.0%
Fiscal
Year
Ends
2012
2013
2014
2015
2016
Fiscal
Year
Ends
2012
2013
2014
2015
2016
Calendar
2011
2012
2013
2014
2015
Past Est’d ’12-’14
5 Yrs.
to ’18-’20
-7.0% 10.5%
-NMF
-NMF
-Nil
-35.0%
NMF
QUARTERLY REVENUES ($ mill.)A
Jan.31 Apr. 30 Jul. 31 Oct. 31
31.3
24.2
29.7
35.4
36.4
42.4
53.7
55.2
44.4
38.3
43.2
54.4
41.7
28.6
41.4
51.4
44.0
33.0
45.0
53.0
EARNINGS PER SHAREAC
Jan.31 Apr. 30 Jul. 31 Oct. 31
d.60
d.72
d.72
d.84
d.84
d.48
d.36
d.72
d.72
d.84
d.36
d.24
d.72
d.84
d.24
d.38
d.50 d.41 d.02 d.02
QUARTERLY DIVIDENDS PAID
Mar.31 Jun.30 Sep.30 Dec.31
NO CASH DIVIDENDS
BEING PAID
Full
Fiscal
Year
120.6
187.7
180.3
163.1
175
Full
Fiscal
Year
d2.76
d2.40
d2.04
d2.18
d.95
Full
Year
---
---
---
---
---
---
---
---
---
---
---
30.4
NMF
8.1
d73.8
-NMF
138.7
.9
241.5
NMF
NMF
NMF
NMF
33.3
NMF
9.6
d84.2
-NMF
105.9
.7
100.8
NMF
NMF
NMF
--
48.2
NMF
9.2
d71.9
-NMF
158.7
.6
134.0
NMF
NMF
NMF
--
100.7
NMF
8.8
d96.6
-NMF
59.6
4.1
107.0
NMF
NMF
NMF
NMF
88.0
NMF
8.6
d71.9
-NMF
77.8
4.4
91.3
NMF
NMF
NMF
NMF
69.8
NMF
7.4
d55.7
-NMF
48.2
4.1
67.5
NMF
NMF
NMF
NMF
122.6
NMF
6.4
d37.4
-NMF
18.8
4.1
45.5
NMF
NMF
-NMF
120.6
NMF
5.2
d35.5
-NMF
61.0
4.0
74.4
NMF
NMF
NMF
NMF
187.7
NMF
4.1
d34.4
-NMF
83.0
52.7
46.7
NMF
NMF
NMF
NMF
180.3
NMF
4.4
d38.1
-NMF
141.9
13.4
158.3
NMF
NMF
NMF
NMF
163.1
NMF
4.0
29.4
-NMF
129.0
13.0
155.2
NMF
NMF
NMF
NMF
Relative P/E Ratio
Avg Ann’l Div’d Yield
175
NMF
5.5
d28.0
Nil
NMF
130
100
135
NMF
NMF
NMF
Nil
Revenues ($mill) A
Operating Margin
Depreciation ($mill)
Net Profit ($mill)
Income Tax Rate
Net Profit Margin
Working Cap’l ($mill)
Long-Term Debt ($mill)
Shr. Equity ($mill)
Return on Total Cap’l
Return on Shr. Equity
Retained to Com Eq
All Div’ds to Net Prof
1.00
Nil
260
11.0%
8.0
40.0
10.0%
15.4%
100
125
200
15.0%
20.0%
20.0%
Nil
BUSINESS: FuelCell Energy, Inc., formerly Energy Research
Corp., develops, manufactures, and markets high-efficiency carbonate fuel cell technology for stationary electric power generation.
The company has patented Direct FuelCell technology. In addition
to commercial products, FuelCell Energy continues to develop nextgeneration carbonate fuel cells and planar solid oxide fuel cells with
development and government research funds. Has over 500 employees. Officers and directors own about 1.7% of stock; POSCO
Power, Korea, 10.5%; NRG Energy 5.8%; (2/15 Proxy). Chairman:
John A. Rolls. President & CEO: Arthur A. Bottone. Inc.: DE. Address: 3 Great Pasture Road, Danbury, Connecticut 06813-1305.
Tel.: 203-825-6000. Internet: www.fuelcellenergy.com.
FuelCell Energy just executed a
reverse stock split. On December 4th,
without notice, the company swapped one
new share for every 12 outstanding older
shares. This was done to prevent being
delisted on the NASDAQ. (An equity
holder with 120 shares ended up owning
just 10 after the transaction.) The move
was taken to comply with the exchange’s
rule of an equity having a minimum price
above $1.
The market did not take the news in
stride. FCEL declined 30% within a few
days of the announcement. Although such
a move should not affect the value of investor’s positions, reverse stock splits are
rightly viewed suspiciously on Wall Street.
Typically, they are considered a red flag
because only desperate companies use the
maneuver to raise their stock price.
Fiscal 2016 (ends October 31, 2016)
may benefit from the possible expiration of a tax law. The Energy Policy Act
of 2005 established a 30% Investment Tax
Credit (ITC) for renewable energy. If no
action is taken by the Congress, which experts now view as very likely, the ITC will
decline to 10% for the commercial market
(FuelCell’s main sector). Demand could increase strongly as customers hurry to have
work done on a new facility before 2016
ends. As a result, there is an outside
chance that FuelCell could end its streak
of consecutive money-losing years on a per
share basis, at a whopping 18. Due to the
company’s track record, we are being conservative however, and looking for share
losses to be about $1.00. Not only could a
large percentage of 2017’s orders be
pushed into 2016, but a reduced ITC, could
result in demand for the company’s products falling precipitously in fiscal 2017.
We caution investors to not get too
worked up over company announcements. FuelCell often issues very positive
notes on new ventures. These ideas, which
sound great on paper, never seem to translate into profits.
Investors should avoid these untimely
shares. Even should some of FuelCell’s
proposed projects prove successful, the
prospect of a reduced ITC, and management’s excessive issuance of new shares
over the past decade, will likely hamper
any share earnings growth.
James A. Flood
December 25, 2015
(A) Based on diluted earnings. GAAP account- (B) Includes intangible assets of $13.7 mill.
ing. Next earnings report due late March. Fiscal /$0.60 share as of 10/15. (C) Includes 1-for-12
year ends on October 31st. Quarterly earnings reverse stock split 12/4/15.
do not add in 2014 due to rounding.
© 2016 Value Line, Inc. All rights reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind.
THE PUBLISHER IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN. This publication is strictly for subscriber’s own, non-commercial, internal use. No part
of it may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product.
Company’s Financial Strength
Stock’s Price Stability
Price Growth Persistence
Earnings Predictability
C
5
5
70
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