The Hyzon Event Horizon
OK, Great Ones … you’ve asked relentlessly, so let’s talk about Hyzon Motors (Nasdaq: HYZN).
Right now, with HYZN down more than 80% … you probably want some answers.
I want the truth!
You can’t handle the truth!
No … wait. That’s not right. You’re Great Ones. You live and breathe the truth. So, let me be frank, Lieutenant Kaffee…
I have some pretty decent investing ideas. I mean, there’s a reason the Great Stuff Picks portfolio sits on an average gain of 87.7% with an overall win rate of 82.4%.
Heck, you even have six triple-digit winners — two of which are above 300%.
But sometimes, those big ideas don’t pan out quite the way you planned. Some of you have been around long enough to remember my worst trading idea: Nikola (Nasdaq: NKLA).
The Great Stuff Picks portfolio took a more-than-30% loss on that one because someone decided to push a truck down a hill…
Yes, I’m still bitter.
But … and I cannot stress this enough … Hyzon Motors isn’t Nikola. Not by a long shot.
Hyzon isn’t down because the company overpromised and under-delivered — or failed to deliver, in Nikola’s case.
All of the reasons, drivers, energy market changes, revenue and growth potential still remain for Hyzon. It’s all still there. The company remains a market leader in hydrogen fuel cell innovation and production.
Hyzon Motors still makes hydrogen fuel cell powered commercial vehicles, including heavy-duty trucks, buses, semitrucks and coaches. And it’s made them for some 20 years now. In other words, Hyzon hydrogen fuel cell vehicles are on the road right now.
Here’s my original write-up and reasoning for buying into Hyzon Motors (AKA Decarbonization Plus), as well as a few articles on why hydrogen power is the best, just in case you needed a refresher:
- Best: Great Stuff Picks Hyzon Motors.
- Hyzon Motors Is About To Go Public.
- The Truth About Hydrogen.
- Hydrogen: It’s a Gas, Gas, Gas!
I get it. You’re big on hydrogen fuel cells. Whatever. What about HYZN?! Why is it down?! I want the truth!
The truth, Great Ones, is that HYZN is down because the market is down. It’s simple, but it’s true.
The uncertainty surrounding the COVID-19 delta variant — including the potential for new lockdowns and economic pressure — has Wall Street in a tizzy.
These reemerging pandemic uncertainties have sent Wall Street back into value mode, leaving riskier investments like small caps, tech stocks and … unfortunately … HYZN by the wayside.
In all honestly, we shouldn’t still be dealing with COVID-19 and all the economic and inflationary concerns that come along with it. If we weren’t, I believe HYZN would’ve rallied in its first day of trading.
Remember, Hyzon was valued at $2.7 billion in its SPAC merger agreement. The company operates in the hydrogen electric vehicle (EV) market, which is estimated to be worth $1 billion right now. By 2031, this market is estimated to be worth $20 billion, growing 34% annually.
But the best part is … Hyzon’s target market is much more than just hydrogen fuel cells. Its technology is powerful enough to decarbonize the entire global transportation market. That means weaning everything off of carbon-based fuels like oil — planes, trains, ships … you name it.
Hyzon sits at the front of a $200 billion diesel engine market, for starters, and once you factor in the wide use cases for its decarbonizing tech, Hyzon’s future looks more and more like a gold mine. That’s why the company expects its revenues to shoot up from $37 million this year … all the way to $3.3 billion in 2025.
In other words, HYZN is currently severely undervalued compared to the growth ahead. So, what should you do?
That, Great Ones, depends on you and your risk tolerance. You do what’s right for you. If that means ditching HYZN right now due to some serious market headwinds, I don’t blame you. The stock is down big since I first recommended it … and that kinda risk isn’t for everyone.
So, if the losses are making you nervous, by all means, do what’s best for you and sell. Put that money in another, more stable investment for these troubling times.
But, as you’ll read down in our Quote of the Week, this isn’t the first time that contagious market worries have unfairly plagued tech stocks … and caused people to ditch their most beloved tech holdings.
That said, if you’re truly into hydrogen-powered vehicles for the long term, I believe this present uncertainty will turn out to be barely a blip on Hyzon’s timeline.
With all that top of mind — I know, it’s a lot — I will keep holding HYZN in the Great Stuff Picks portfolio. I believe the stock will come back in a big way … that Hyzon Motors will be right up there with Plug Power at the top of the hydrogen power market.
Until something fundamentally changes with Hyzon Motors itself, I’m trusting my original research and holding with diamond hands through this ridiculous rough patch in the market.
If something does fundamentally change with Hyzon’s ability to take over this hydrogen power market, trust that we will revise and pivot as need be. You’ll be the first to know.
Other than that, just hang tight and relax, Great Ones! Enjoy the ride … or try to. If Hyzon’s volatility isn’t your speed, don’t give up on the EV market altogether.
The EV market is still on an absolute roll as cars go electric, and it’s shown extraordinary gains higher than 1,000% in a matter of a year. What nobody is talking about is the real EV profit story. It’s under the hood — in the technology making it possible. And no, I’m not talking about the lithium battery.
So, Great Ones, did you have a heart attack when looking at your Great Stuff Picks position on Nvidia (Nasdaq: NVDA) this morning? I mean, NVDA went from about $750 to $190 overnight!
Never fear! Nvidia just underwent a four-for-one stock split. You can breathe now. So, if you owned 10 NVDA shares yesterday, you now own 40 shares. Seems like a pretty sweet deal to me. Now that NVDA shares are more accessible to individual investors — Nvidia’s original intent behind the split — there’s more room to run from additional participation in the rally.
So, keep holding, Great Ones, and ride that rally higher!
Blue Origin founder, former Amazon CEO and rumored space alien Jeff Bezos made it one step closer to phoning home today. Riding the Blue Origin spacecraft New Shepard, Bezos and three other astronauts blasted off this morning, touched the edge of space and returned home safely.
Overall, Bezos’s space misadventure lasted five minutes — about as long as an Amazon Warehouse lunchbreak for us Earthbound peons.
While not the first company to reach space, Blue Origin is the first to carry a paying customer to the final frontier … which, let’s be honest, is the whole point of Virgin Galactic and Blue Origin. Both companies are still a ways away from raking in that sweet space revenue, but the end goal now appears much closer than before.
The question remains, however: Who’s going to buy these spaceflights? And how many of the uber-rich will line up right away? Your guess is as good as mine — let me know in the inbox.
Call me jaded, but I don’t see how launching more billionaires up into space is a massive service to humankind.
Sure, I’d like to get off this rock as much as the next guy, but I thought Matthew McConaughey already figured out interstellar space travel … right? Or am I in the wrong timeline?
Obviously, if we mention one spacefaring CEO, the other(s) are right behind. So, it’s no surprise that right after Bezos followed Branson into space, Elon Musk said: “Screw you guys, I’m going home.”
Musk suddenly decided today that he’d “rather focus on building Starship” than voyage into space himself. How humble of him. We’re so impressed. Much humility, wow.
What actually happened was Elon didn’t want to come third place in the Richie-Rich space race and decided building more spaceships would make him that much cooler — because nothing changes Elon’s mind faster than someone else beating him to the punch.
You can’t lose the game … if no one knows what game you’re playing!
For those of you who aren’t nuts about enterprise systems and software, here’s your quarterly reminder that IBM (NYSE: IBM) still exists — and it’s doing well too!
Last quarter, the company saw its best revenue growth in three years. The problem there is that revenue growth was a whopping 3%. C’mon, IBM — I’ve got bathtub mold growing faster than that. (I don’t, actually … that’s disgusting.)
When you’re IBM, though, 3% growth is enough to stay afloat. Anyway, notoriously tight-lipped CEO Arvind Krishna said back in April that he thinks “that the spend environment overall is improving” for IBM. With today’s report, he built the hype even further, raving that “the overall spend environment continues to improve.”
Both earnings and revenue topped estimates for last quarter, so I’d say Krishna is right on the money … albeit drier than saltines on sandpaper. I mean, “spend environment?” I’m at the edge of my seat here, Krishna. Just enthralled. Such emotive and provocative words — you want a Pulitzer?
Editor’s Note: An Epic Comeback!
One of my colleagues has nailed almost every major bitcoin call over the last four years … and he is predicting a massive comeback! Last week, he revealed what he and his team believe is the best way to get the most out of it if this comes to transpire. If you like big gains, this should be right up your alley!
Longtime Great Ones, newbie Great Ones, lend me your ears … and eyes! We have both a chart and a quote of the week on deck today — anyone ready for the Tuesday twofer?
Actually … can we not make that a thing? “Twofer” just sounds … no.
Fine, spoilsport … no Friday Four Play for you.
At least check out this quote from Brian Belski, chief investment strategist over at BMO Capital Markets:
Funny, isn’t it? In one brief quip, Belski sums up all of the market’s inflation fears … all these investor worries about transitory macro factors. Poof. Gone. One big nothingburger.
Actually, I thought we were on record all year long saying the same thing? How many times have I rambled about inflation being overblown? Let’s see, there was last week … a few times in June … yup, May as well … all through April … oh, and March too.
Jeez, thanks for the excessive link-clicking, dude.
You’re welcome! What’s Great Stuff without the obligatory back-patting?
Anyway, I’m bringing all this up for a point: While inflation is a concern — a very limited concern, as we’ll see in a sec — it’s short-term inflation. And the market is making too big a deal out of it either way.
Since people like to worry when they see other people worrying, the fears were as contagious as the dang pandemic itself. (Keep those COVID-spiracies coming, by the way. Our inbox has been a blast to read this week.)
And once the first worrywart started to freak out, value investors started to sell stocks they perceived as risky, like tech stocks.
Remember that whole “shift back to value stocks” thing everyone was crazy about for like … two weeks? Because apparently, people going outside again meant tech stocks were suddenly irrelevant? I remember those times. Pepperidge Farm remembers those times.
I also remember when said value investors missed the boat completely when the tech stocks they sold came crawling back to life like Thriller.
Other than that … not much has actually changed to warrant these inflationary fears. It’s not like inflation is invading every last recess of the market. Peep this handy dandy chart that dovetails flawlessly with Belski’s quote:
It’s like inflation is limited to a few oil-and-chip-influenced sectors, huh? Gas, used cars, new cars and other transportation. So … the same auto market that we’ve harped on for a few weeks now? I’m starting to wonder why tech stocks were made out to be poison just a few months ago. What tech do you see in this chart?
Ask yourself: How much of this inflation is just travel-related? Airfare, rental cars, hotel rooms — it’s so expensive to travel, you’d think we were in a global pandemic or something.
If you don’t need to buy a new/used car … if you don’t need to travel across the world … if you’re not overpaying for a house anytime soon … let me be the first to tell you that, as an investor, you’re going to be OK.
Find the broad-market mega trends you’re interested in. Stick with them. Don’t sell your stocks (tech or otherwise) just because Wall Street gets antsy. Tune out the inflation talk like we’ve recommended all year.
You’ll be OK. Really.
Also … this is a much more positive, uplifting way to end the day than I’m used to. Umm… What do we say here? Have a tremendous Tuesday? Y’all keep fighting the good fight against inflation fears? Yeah, let’s go with that.
If there’s something you’ve been dying to get off your chest — a rant that cannot wait another day — drop me a line sometime.
Let me know in the ol’ inbox-a-roo what you’re up to this week. GreatStuffToday@BanyanHill.com is where you can let your words fly like the wind and join in the Great Stuff. And in the meantime, here’s where else you can find us:
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Until next time, stay Great!
Editor, Great Stuff