Knobias ClipReport(7-10-2007)

Submitted from Knobias ClipReport

Monday saw the Dow up ahead of the kickoff to second quarter earnings with Alcoa’s report after the market close. Many investors thought the lowered expectations could be easily beaten causing optimism ahead of the earnings season.

With many traders returning from their extended holiday, the greeting they were met with was a market full of momentum plays that were trading similar to biotech names expecting news.

Solar names have been especially hot over the past few weeks and have recently been joined by other obscure alternate energy names that were once momentum plays in recent summers.

Capstone Turbine Corporation (CPST), Plug Power Inc. (PLUG), Quantum Fuel System Technologies Worldwide (QTWW), Satcon Technology Corp. (SATC), Beacon Power Corporation (BCON), Active Power Inc. (ACPW), Ballard Power Systems Inc. (BLDP), and FuelCell Energy Inc. (FCEL) shares were all up on increased attention. The names have all been momentum plays in past years and all involved in the alternate energy sector through dealing with fuel cell or clean electrical energy technology.

One name that was especially interesting was Hydrogenics Corporation (HYGS). The Company is a developer of clean energy solutions, advancing the hydrogen economy by commercializing hydrogen and fuel cell products. The Company has a portfolio of products and capabilities serving the hydrogen and energy markets of today and tomorrow.

Headquartered in Mississauga, Ontario, their operations revolve around three business units- OnSite Generation, Power Systems and Test Systems. Within these business units, there are varying degrees of commercial readiness and this reality impacts many aspects of their operations.

Over the past two months, shares have gone from trading at their cash levels to doubling in value.

In early May the Company was notified that the shares no longer met Nasdaq listing requirements due to their depressed bid price. Following that announcement, the Company reported earnings that were slightly better than estimates. First quarter numbers were revenues of $6.9 million for the first quarter of 2007, a 12% increase from revenues of $6.1 million for the comparable period of 2006. Net loss was $8.3 million for the first quarter of 2007, consistent with the first quarter of 2006. Per share amounts were a loss of 9c versus a loss of 9c beating the estimate for a loss of 10c.

Included in the better than expected earnings report were new initiatives that were expected to cut the Company’s cash burn by a third annually. Also announced was a backlog close to $31 million.

With the summer heat wave affecting much of the continental United States, many of these alternate energy and fuel cell names have seen increased action on the expected subsequent energy shortcomings. Ford also released some interesting news regarding their fuel cell cars which has also shed added legitimacy on the area. With any new government initiatives discussed during this congressional session, the entire area could see even more action. Investors would be wise to watch.



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