Plug Power Inc: How To Buy Its Stock At A Steep Discount

Updated on

Plug Power Inc (NASDAQ:PLUG) stock is down about 3% today to $5.83 at 11:15 AM EDT. But the stock has rallied a whopping 258% year-to-date. Stock Options Channel shows you a way to buy Plug Power at as much as 72% discount. The fuel cell technology company priced its April 25 secondary offering at $5.50. The company had initially planned to sell 15 million shares in the offering. However, it increased the deal size to 22.6 million shares given high demand.

Plug Power stock up just 7% since its secondary offering

Investor bullish on Plug Power made considerable investments at the time of secondary offering. About four months later, the stock is less than 7% above the offering price. If you couldn’t participate in the offering, but want to purchase Plug Power shares at a cheaper price, Stock Options Channel says you might benefit from selling puts.

The January 2015 put contract has a strike price of $2. It has a bid of about 30 cents. If the contract is exercised, it will result in a cost basis of $1.70. If the contract is never exercised, you as a put seller will keep the premium, which gives 15% return against $2 commitment. Plug Power has been a highly volatile stock, beginning the year at $1.55 and rising to as high as $11 on March 10.

Plug Power is upbeat about its future growth

Plug Power reported its second-quarter results on August 14. The company posted a small profit during the quarter. The Latham, New York-based company’s net income came in at $3.8 million or 2 cents per share, compared to a loss of $9.3 million or -14 cents in the same quarter last year. Income was influenced by $9.6 million related to stock warrants. Revenue more than doubled from $7.5 million to $17.3 million.

The fuel cell company exited the June quarter with net working capital of $190.4 million and cash of $168.6 million. Plug Power shipped 687 fuel cell units in the latest quarter, beating its forecast of 650 units. The company’s strong quarter was driven by robust demand from customers such as Wal-Mart Stores, Inc. (NYSE:WMT). Plug Power CEO Andy Marsh is upbeat about the company’s future prospects. He sees a “plethora of global opportunities” for hydrogen fuel cells.

Leave a Comment