2 Alternative Energy Stocks on the Move After Earnings

Plug Power Inc (PLUG) and FuelCell Energy Inc (FCEL) are moving in opposite directions after reporting quarterly earnings

by Kirra Fedyszyn

Published on Mar 10, 2016 at 11:37 AM
Updated on Jun 24, 2020 at 10:16 AM

Alternative energy stocks Plug Power Inc (NASDAQ:PLUG) and FuelCell Energy Inc (NASDAQ:FCEL) are both fresh off their quarterly earnings reports and making big moves -- though PLUG and FCEL are heading in opposite directions today. While call buyers were bracing for PLUG's big pop, it looks like short sellers successfully predicted FCEL's post-report plunge.

PLUG reported fourth-quarter earnings in line with estimates
, while revenue came in above analyst predictions. The stock is up 11.6% to $2.12 as a result, and a recent batch of call buyers may be cheering the rally.

Specifically, it looks like there was some buy-to-open activity Wednesday on PLUG's 2-strike calls -- both the weekly 3/11 and monthly March expiration, which means these traders were targeting a move above $2.00 by the end of this week or next. The volume-weighted average price (VWAP) on the weekly 3/11 2-strike call has jumped from $0.06 yesterday to $0.14 at last check, while VWAP on the March 2 call is up to $0.16 from Wednesday's $0.10 -- which means pre-earnings PLUG call buyers are already sitting on paper profits.

Technically speaking, PLUG has been trending lower beneath its 200-day moving average since late 2014, so it's little surprise that quite a few traders have been betting against the security. More than 19% of the stock's available float is currently sold short, representing 27 times Plug Power Inc's (NASDAQ:PLUG) average daily volume. It's likely some of the weaker bearish hands are hitting the exits today, given the stock's big breakout -- though PLUG remains pinned just below its 200-day moving average, currently docked at $2.15.

FCEL, meanwhile, is down 11.8% at $6.24 after reporting a wider-than-expected loss for its fiscal first quarter, paring its year-to-date lead to 20.5%. The shares could suffer if analysts reevaluate their current bullish positions -- all three brokerage firms following the stock maintain "strong buy" ratings, and the average 12-month price target of $16.67 is in territory not seen since March 2015.

FCEL shares have regained some ground since hitting a record low of $4.51 on Jan. 20, but remain pinned below their 120-day moving average -- which has highlighted the stock's slide since September 2014. In light of this long-term underperformance, over 14% of FCEL's float is sold short. Today, however, FuelCell Energy Inc's (NASDAQ:FCEL) big drop has landed it on the short-sale restricted list.

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