3 Hydrogen Stocks to Buy on the Dip: May 2024
Crisis will eventually lead to opportunity for hydrogen stocks to buy.
Granted, we’re still waiting to see what happens with the restrictive 45V tax credits. That’s because, as the credits are currently set up, “it could slow the industry’s growth if not changed,” as noted by Ernest Moniz, former energy secretary, who heads the consortium formed to organize a market for clean hydrogen, called the Hydrogen Demand Initiative, as quoted by Barron’s.
We’re also waiting on potential interest rate cuts from the Federal Reserve. At the moment, higher rates have made it far more expensive to finance renewable energy projects.
However, with a good amount of fear priced into hydrogen stocks, and new investments, such as the recent $1.78 billion Department of Energy loan to Plug Power (NASDAQ:PLUG), it may be time to use the excessive fear in hydrogen as an opportunity.
That being said, here are just a few hydrogen stocks to buy on the dip.
Linde (LIN)
At $432.42, Linde (NASDAQ:LIN) is an oversold bargain.
At the moment, LIN is over-extended on RSI, MACD, and Williams’ %R, and just starting to pivot higher. From its last traded price of $432.52, I’d initially like to see it refill its bearish gap at around $440. From there, with patience, I’d like to see it refill its other gap at $460. Plus, as we wait for LIN to tick higher, we can collect its yield of about 1.3%.
While the stock pulled back on earnings, CNBC just said, “Nothing in the report, including the subdued guidance, shakes our belief that this is among the high-quality companies around, with all the tools needed to reliably grow earnings in the quarters and years ahead.”
In addition, analysts at Mizuho raised its price target on LIN to $512, with a buy rating. BMO Capital also raised its price target to $510 a share, noting, “Linde’s solid free cash flow should also help the company continue to enjoy double-digit EPS growth,” as noted by TheFly.com.
Bloom Energy (BE)
Just days ago, I noted, “After finding strong double-bottom support at around $9, Bloom Energy (NYSE:BE) is now up to $11.31. From here, if it can break above prior resistance at $12.50, it could test $15.”
Shortly after, it did break above $12.50 and tested a high of $13.50. Now back to $12.33, I’d use the dip as an opportunity again. From $12.33, I’d still like to see it retest $15.
Helping, CEO KR Sridhar recently said Bloom is “seeing strong market interest, increasing momentum and robust commercial activity across diverse end markets,” CEO KR Sridhar said, “also viewing data centers and artificial intelligence hardware supply-chain industries as strong growth opportunities,” as noted by Seeking Alpha.
Also, its recent agreement with Intel (NASDAQ:INTC) calls for additional capacity for Bloom’s energy cell-based servers for data centers. That should draw even more attention for Bloom with its focus on the data center market, which is quickly growing thanks to the artificial intelligence boom.
Direxion Hydrogen ETF (HJEN)
The last time I mentioned the Direxion Hydrogen ETF (NYSEARCA:HJEN), it traded at $10.80 on May 3. At the time, it was just starting to pivot from its recent dip to about $10. It would go on to test $12 and again looks like a solid opportunity on a dip back to $11.48.
With an expense ratio of 0.45%, the ETF offers exposure to about 30 hydrogen stocks with a focus on hydrogen production and generation, storage and supply, fuel cells and batteries, in addition to systems, solutions, membranes, and catalysts. Some of its top holdings include Bloom Energy, Air Liquide (OTCMKTS:AIQUY), Ballard Power (NASDAQ:BLDP), Linde, and Plug Power.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
