Tomahawk, WI 03/21/2014 (Basicsmedia) – To some extent, FuelCell Energy Inc (NASDAQ:FCEL) benefited from the “good news” surrounding the fuel cell industry in general and Plug Power Inc (NASDAQ:PLUG) in particular. But Plug Power is hitting circuit breakers after dropping more than 10% in a day. So, it’s far from a reliable indicator.

While FuelCell has a clean and environmentally-friendly technology in its hydrogen-based on-site power generation plants, it’s only likely to appeal to companies in places like California which tend to be leaders in environmental regulations. This does not guarantee long-term growth potential for the company. There are many companies operating in the fuel cell business who are all witnessing rising stock prices with very little basis in reality. But not every single player in clean energy technology or fuel cells is going to be a huge success story like Tesla Motors Inc (NASDAQ:TSLA).

Some Good News

FuelCell Energy Inc (NASDAQ:FCEL)’s total revenues for 1Q2014 were $44.4 million, compared to $36.4 million for 1Q2013. Product sales rose by about $5 million to reach $34.5 million in 1Q2014. The company showed a profit of $2.2 million in 1Q2014 compared to a loss of $2.3 million in 1Q2013. Loss from operations in 1Q2014 declined to $7.6 million from $11.1 million in 1Q2013. The company reported a cash, cash equivalents and restricted cash total of $104.6 million as on January 31, 2014.

But the bad news includes the fact that FuelCell Energy Inc (NASDAQ:FCEL)’s total backlog stood at $326.8 million as on January 31, 2014 compared to $428.3 million on January 31, 2013. With the growth in fracking, tar sands and plentiful natural gas from shale gas, tradition non renewable sources of hydrocarbon are on the rise. Add ever more fuel efficient automobile engines, stringent emission norms and the new fuel economy standards that President Obama recently announced for trucks to be put in place by 2018 to the equation, and it’s easy to see that fuel cells and other alternative, renewable sources of energy are going to be a bit of a tough sale.

Mindless Speculation

What is going on in all these stocks in the fuel cell industry is pure speculation as reflected in the huge number of stocks being traded on a daily basis. This kind of scenario results in professional traders and veteran speculators making money at the expense of amateur traders and speculators who lose real money that they will most likely never see again.

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