How to Buy FuelCell Energy (FCEL) Stock

Check out our investing software - Benzinga Pro!

FuelCell Energy (NASDAQ:FCEL)

3.590

-0.11 [-2.97%]
3.45 – 3.65
2.87 – 11.629
3.65
386.61M
12.79M/15.32M
1.39B
386.61M
/0%
0.000
386.31M

With the global push for clean energy solutions, interest has shifted toward renewable and sustainable power infrastructures. Getting to a completely green process, however, requires considerable time. While on this journey, companies like FuelCell Energy (NASDAQ: FCEL) act as an intermediary, utilizing a chemical process to convert natural gas or biogas into practical energy with virtually zero pollution.

As one of the biggest publicly-traded fuel-cell operators, FuelCell Energy has a significant market presence. Additionally, the company compels long-term investor consideration for its energy storage systems — an incredibly relevant innovation given the recent Texas winter storm.

How to Buy FuelCell Energy (FCEL) Stock

Garnering tremendous attention in 2020 and earlier this year, FuelCell Energy attracts volumes of analyst coverage and insights. Nevertheless, recent volatility has imposed substantial red ink on FCEL stock, necessitating a careful approach.

It’s a good idea to understand how to buy stocks when considering FCEL or similarly wildly trading security. It’s the nuances which can help mitigate some of the unpredictability when dealing with these high-momentum names.

Step-by-Step Guide

  1. Pick a brokerage.

    Before you can even think about acquiring FCEL stock, you must pick a brokerage to conduct your trades. Because of growing interest in stock trading — helped in no small part by the work-from-home phenomenon associated with the pandemic — virtually all brokerages have standardized certain benefits or incentives.

    For instance, it’s no longer unique for an online brokerage to offer commission-free trading. With competition rising, most platforms offer this incentive. Instead, the determination points of choosing from the best brokers comes down to personal matters such as preference and anticipated use of the platform.

    If you’re interested in stocks as a means to grow wealth but don’t have the time to watch over your account constantly, then a mobile trading app may be most appropriate for you. On the other hand, if you anticipate expanding your trading and investing acumen, a comprehensively robust platform is the way to go.

  2. Decide how many shares you want.

    To determine how many shares you want to purchase, first establish how much you want to spend on your target security. Naturally, this figure is different for everyone and will encompass factors such as risk-reward profile and budget size.

    Also, keep in mind that FCEL stock is presently volatile. Therefore, you may want to use a tactic called dollar-cost averaging. Instead of buying all-in at a particular price, buy some shares now but keep the powder keg dry. Later, if the price dips, you can buy even more shares.

    Stock market transactions are based on share count, not dollar amount. Take the amount you wish to invest and divide that by the stock’s market price. The resultant whole number is the amount of shares you can purchase. On a side note, some brokers allow you to purchase fractional shares but this is not a standardized feature in the brokerage industry.

  3. Choose your order type.

    Because of the constant fluctuations in the market, price has a different meaning in the equities sector than in a traditional retail environment. Also, the rapidly evolving valuations means that you need to specify your order type before you can conduct a deal. Below are the terms and concepts to know.

    Bid: The bid represents the highest price a buyer will pay for a stock. It will always be lower than the ask.
    Ask: On the other hand, the ask is the lowest price that a seller will take. The ask will always be higher than the bid.
    Spread: Also called the bid-ask spread, this is the difference between the bid and ask price. This concept is significant because profiting off the spread is how market makers earn their living. As well, the spread represents liquidity — lower spreads indicate higher liquidity while higher spreads indicate lower liquidity.
    Limit order: For maximum control and transparency in your stock transactions, you should opt for a limit order. This order type executes a trade only at your predetermined price. The downside with limit orders is that no guarantee exists that your target stock will reach that price.
    Market order: Sometimes, you just want to execute the deal no matter what. In that case, the market order is your best friend, which guarantees a filled order if placed within normal session hours. However, market orders only execute at the next available price and at terms least favorable to you — buy orders on the ask, sell orders on the bid.
    Stop-loss order: To protect your portfolio’s total value from the effects of volatility, you can place a stop-loss order on specific stock holdings. Stop-loss orders execute at a predetermined price or the next available price. If the next available price happens to be far lower than the predetermined price — such as during a gap-down session — you will incur a steeper-than-anticipated loss.
    Stop-limit order: Stop-limit orders give you greater control and transparency in your protective automated orders by only fulfilling at a predetermined price. This prevents the sometimes nasty surprises associated with gap-down sessions. However, similar to limit orders, you have no guarantee that the stock in question will hit the predetermined price.

  4. Execute your trade. 

    When you are ready to place your trade, perform the following steps.

    For market orders:

    • Choose your action type (buy or sell).
    • Enter the shares you want to acquire or vacate.
    • Hit the execute button.

    For limit orders:

    • Choose your action type (buy or sell).
    • Enter the shares you want to acquire or vacate.
    • Set your desired acquisition price.
    • Hit the execute button.

    Because of the volatility of FCEL stock, order types take on greater importance. If you’re dead set on acquiring market shares, go with market orders. However, because FCEL has a tendency of moving across the map, limit orders afford predictable cost management.

Best Online Brokers for FCEL Stock

Below is a list of the best brokerages for your consideration.

get started securely through Benzinga Pro’s website
get started securely through Stock Rover’s website
Best For
Professional Investors
N/A
1 Minute Review

Stock Rover is a comprehensive stock analysis and screening tool that gives investors access to high-quality research tools, educational content, expert analysis and more. Stock Rover goes well beyond standard analysis tools, offering account holders 1 of the most comprehensive sets of screening criteria and research qualifications that we’ve seen. For example, users can filter investment opportunities using over 650 metrics with Premium Plus access.

Stock Rover offers 4 different plan tiers, which can become confusing for new investors who aren’t exactly sure which tools they’ll use. However, free accounts offer a wide range of functionality that gives users a better feel for Stock Rover’s setup, along with a free trial of Premium Plus functionality. Getting started with a Stock Rover account is also exceptionally easy — we were able to open our free account in under 60 seconds.  

Best For
  • Professional investors who need high-quality analysis and research tools
  • Visual learners who benefit from seeing data laid out using charts and graphs
  • Anyone searching for the widest array of screening metrics
Pros
  • Incredibly comprehensive range of investment analysis tools
  • Over 650 screening criteria included on Premium Plus plans
  • Simple account opening and brokerage account linking
  • Free accounts available
Cons
  • Wide variety of plan options that can be more confusing for new investors
get started securely through Tradingview’s website
Best For
Charts
N/A
1 Minute Review

TradingView is a powerful stock screener, charting platform and research powerhouse providing a massive range of tools investors can use to learn more about the markets. Some of TradingView’s most impressive features include its fully operational mobile app, wide range of screening criteria, custom script incorporation and much more.

In addition to charting and research tools, TradingView also offers a wide range of educational tools. View news feeds associated with each asset, read articles, view real-time market data and even watch livestreams with professional traders to improve your skills. Paper trading accounts are also available to help you master TradingView’s wide selection of tools.

Although TradingView’s content can be overwhelming for newer traders and investors, the platform remains among the most impressive research hubs on the internet.

Best For
  • Professional investors
  • Investors with programming experience
  • Traders who need minute-by-minute updates
Pros
  • Impressive selection of research tools
  • Comprehensive stock screening
  • Free accounts available
  • Wide selection of engaging educational resources
Cons
  • Customer service choices not all-inclusive
  • Higher-tier plans out of some investors’ budgets
  • Certain areas of the website poorly organized
get started securely through Webull’s website
Best For
Intermediate Traders and Investors
N/A
1 Minute Review

Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.

Webull is widely considered one of the best Robinhood alternatives.

Best For
  • Active traders
  • Intermediate traders
  • Advanced traders
Pros
  • No account maintenance fees or software platform fees
  • No charges to open and maintain an account
  • Intuitive trading platform with technical and fundamental analysis tools
Cons
  • Does not support trading in mutual funds, bonds or OTC stocks

FuelCell Energy Stock History

No question exists that FuelCell Energy stock has been among the top performers of 2020, gaining a very impressive 442%. In large part, investors were excited about the relevant underlying business, particularly what it would mean under the new U.S. administration.

It’s no surprise, then, that FCEL stock truly gained momentum following the 2020 presidential election result.

However, sharply rising stocks tend to correct even more steeply in magnitude. That’s the biggest threat you should worry about before taking a position in FCEL stock. While it takes much work to get a security into the stratosphere, selling pressure tends to evaporate hard-earned valuations at a rapid pace.

Pros to Buying FuelCell Energy Stock

  • Relevance: Under President Biden’s plan for clean energy integration and environmental justice, the U.S. will enact policies to become a net-zero emissions society by 2050. That’s not going to happen with combustible energy production processes, which bolsters the argument for FCEL stock and the underlying fuel cell business.
  • Expansion: FuelCell not only offers practical clean energy solutions in the domestic market but it has successfully reached abroad. With global metropolitan areas becoming even more crowded, a need for space-sensitive and pollution-free power production has risen. This dynamic naturally suits FuelCell’s business model.
  • Storage: Through its hydrogen-conversion process, FuelCell’s battery storage system can harvest energy for long-term storage and distribute it when necessary, such as during peak demand or for emergencies.

Cons to Buying FuelCell Energy Stock

  • Economics: While fuel cells offer a promising solution for clean energy production, they present a cost challenge. That’s according to Yale Climate Connection, which reported that the pursuit of economies of scale in the industry requires the purchase of more fuel cells, which are inherently expensive. This causes a Catch-22 dilemma.
  • Unprofitable: Despite growing interest and frankly need for clean energy, FuelCell’s financials leave much to be desired. Net income has been negative since at least 2006, while free cash flow is consistently in the red.
  • Volatile: Analysts typically consider the current position that FCEL stock is in as a “falling knife.” It’s difficult to know when the selling pressure will fade, making shares a risky gamble.

A Compelling but Highly Risky Trade

Thanks to growing interest in clean energy, FuelCell Energy’s stock has risen dramatically, both literally and figuratively. By taking natural gas or biogas and converting it to practical power while emitting close-to-zero emissions, FCEL is an encouraging transitional step.

The drawback, however, is that fuel cell processes often require nonrenewable energy commodities while the world is aiming for a fully renewable future. Also, profitability concerns for both the industry and FCEL stock specifically weigh on the investment proposition.