With the world going green, some of the most explosive opportunities can be found in hydrogen stocks. Analysts at Markets and Markets say the market could be worth $410.6. billion by 2030. Goldman Sachs (NYSE:GS) says we could be looking at a $1 trillion opportunity by 2050. Meanwhile, the U.S. Department of Energy just said it would invest $1 billion in hydrogen production projects as part of its Regional Clean Hydrogen Hubs program, creating a big opportunity for some of the leading hydrogen stocks.
Even better, hydrogen emits no greenhouse gases when it’s burned. Instead, the only waste product is water, making it even more desirable than natural gas and oil. With that said, now is the best time to jump into leading hydrogen stocks.
Leading Hydrogen Stocks: Air Products and Chemicals (APD)
One of the top, most oversold hydrogen opportunities is Air Products and Chemicals (NYSE:APD). All after, it gapped from $304 to $285.40 on earnings. While it posted better-than-expected adjusted earnings of $595.6 million, or $2.67 a share, it missed on revenues, which fell 5% year over year to $3 billion. The company also narrowed its full-year guidance, now seeing earnings per share (EPS) of $11.40 to $11.50 a share, as compared to prior guidance of $11.30 to $11.50.
With the negativity priced into the gap, I’d use weakness as an opportunity. For one, APD is now technically oversold on relative strength, MACD, and Williams’ %R. Two, the last time APD became this technically oversold, it bounced from about $270 to $304. Helping things, analysts at Mizuho just raised their price target on APD to $330 from $322, with a Buy rating.
Even better, APD recently declared a dividend of $1.75 a share. APD has a current yield of 2.44%.
Bloom Energy (BE)
I’d also use weakness as an opportunity with Bloom Energy (NYSE:BE). After running from about $13 to $18.70, the stock dropped to around $15, finding support. From here, I’d like to see BE challenge $18.70 again initially, with a long-term target of $24. Helping, JP Morgan (NYSE:JPM) just raised its price target to $22 from $20 a share.
While recent earnings took it down, most of that negativity is now priced in. Not only did it miss on EPS, it missed revenue targets too. Again, not to sound like a broken record, but I’d use that weakness as an opportunity to buy. Plus, we have to consider Bloom just unveiled two new products that could boost growth moving forward. For one, its Series 10 energy server is expected to meet the needs of those in the data center market.
Two, it also just launched its advanced Combined Heat and Power (CHP) solution, which uses high-temperature exhaust steam for industrial steam production and absorption chilling, as noted by the company. “Bloom’s advanced CHP solution is particularly attractive to the world’s largest CHP markets in Germany, South Korea, Italy, Japan and the United States, where almost half of the operating CHP systems are over 20 years old and ready for replacement,” they added.
Global X Hydrogen ETF (HYDR)
Or, if you simply want to diversify with several big hydrogen names at a lower overall cost, look into ETFs such as the Global X Hydrogen ETF (NASDAQ:HYDR). With an expense ratio of 0.5%, the ETF offers exposure to companies involved in the production and integration of hydrogen and the development and manufacturing of hydrogen fuel cells.
Some of its top holdings include Plug Power (NASDAQ:PLUG), Bloom Energy, Ballard Power (NASDAQ:BLDP), ITM Power (OTCMKTS:ITMPF), and FuelCell Energy (NASDAQ:FCEL) — to name a few. HYDR has also become oversold after pulling back from about $10.50 to $9.40. From here, I’d like to see an initial retest of $10.30, with a potential test of $12 shortly after.
If hydrogen can become the explosive market many expect, ETFs and related stocks could push aggressively higher. The time to buy is now on pullbacks.
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.
