Shop Smart! Shop H-Mart!
Great Ones, today we’re going to talk about Walmart (NYSE: WMT), Plug Power (Nasdaq: PLUG) and lift trucks … 9,500 of them to be exact.
That’s … oddly specific. Go on.
Now, these lift trucks aren’t your grandfather’s lift trucks. They don’t run on smelly natural gas. Anyone who’s ever worked in a warehouse setting knows natural gas-powered vehicles smell to high heaven.
That’s why they make battery-powered ones, Mr. Great Stuff.
True. But, as we all know, batteries take forever to charge. And when you’re picking orders in a high-volume warehouse, ain’t nobody got time for chargin’.
But these 9,500 lift trucks aren’t even battery operated.
No sir! They are … wait for it…
Oh, no! He’s gonna say it!
Powered by hydrogen!
That’s right. Pull up. Fill up. Get on with your pickin’ and grinnin’.
Dude, nobody is grinning while picking in a warehouse.
Shhh! Don’t break my stride!
Now, these 9,500 lift trucks aren’t owned by some small fry either. They’re owned by none other than the biggest brick-and-mortar retailer on the planet: Walmart.
Back in September 2020, Walmart pledged to emit zero emissions by 2040. That’s a massive undertaking for the world’s largest retailer.
As part of that zero-emissions plan, Walmart is championing hydrogen fuel cell-powered lift trucks across all its warehouse, shipping and logistics divisions.
And … surprise, surprise … Walmart has already been working with Great Stuff Picks holding Plug Power to accomplish this goal. In fact, Plug Power helped supply all of Walmart’s 9,500 hydrogen-powered lift trucks.
That’s cool and all. But what about the hydrogen?
I’m glad you asked. The whole reason I’m telling you this today is because Walmart just signed a hydrogen supply deal with Plug Power for 20 tons of hydrogen per day. And we’re not talking any regular old hydrogen either — we’re talking green hydrogen.
There are a couple different types of hydrogen out there, all color-coded.
There’s “gray” hydrogen, which is made from fossil fuels like natural gas, coal or methane.
There’s “blue” hydrogen, which is also made from natural gas, coal and methane, but the carbon emissions created in the procedure are captured and stored — thus making it a bit cleaner than “gray” hydrogen.
But “green” hydrogen … that’s the holy grail. Green hydrogen is produced from water using clean renewable energy sources, such as solar and wind power.
And Plug Power is the market leader when it comes to the holy grail of renewable energy … erm, green hydrogen.
I know there are more than a few of you out there who said this wasn’t possible. That green hydrogen doesn’t exist. That it’s a pipe dream and will never compete in a market dominated by electric vehicles and batteries.
Well … green hydrogen does exist. Plug Power is making it by the ton. And now it’s selling that green hydrogen to the largest retailer in the world.
You see, Walmart knows that you can’t wait around for your glorified PowerWheels to charge. Grandma wants her cat food picked and shipped right meow, dagnabit!
Hydrogen fuel cell-powered lift trucks solve both the expediency issue and the zero-emissions pledge Walmart made in 2020.
Some of y’all wondered why I didn’t sell PLUG stock out of the Great Stuff Picks portfolio back at the beginning of 2021. This is why. Those February 2021 all-time highs will seem like child’s play once the green hydrogen ball gets rolling.
Rolling? This is just Walmart.
Just Walmart? That’s the first time I’ve ever heard “just Walmart,” but whatever…
Walmart is just the first domino to fall into Plug Power’s lap. Plug also has relationships with Amazon, Home Depot, Nike, Southern Company and many others. So Walmart is an early adopter of hydrogen fuel cell technology here, but it won’t be the last.
Walmart is no fool. It knows what it’s doing and once it proves how well hydrogen fuel cell lift trucks work … the flood gates will open for Plug Power.
I’ve been saying this for years now, Great Ones. Some of y’all believed me, most didn’t. Well … how do you like them Walmart apples?
With the market the way it is right now, y’all have plenty of time to invest in your own PLUG stock position. But I urge you not to wait too long. The hydrogen power market is gonna be ridiculously huge, and Plug Power is the biggest player in the game right now.
But what if you’re already fully plugged into PLUG stock and you’re still still looking for more alternative energy action? Well, check this out:
A tiny Silicon Valley company is using AI to unleash the largest untapped energy source in the world. I’m not talking about oil, gas, wind, hydro, nuclear … or anything you’ve likely heard about before.
Yet this breakthrough is set to help launch an era of cheap, abundant electricity the likes of which the world has never seen.
Adam O’Dell just recorded a free video where you can get the whole story, as well as the details of the company that’s central to this breakthrough. Act fast, as this stock could be moments away from taking off.
Good: JNJ’s So Wolk
Johnson & Johnson (NYSE: JNJ) was one of several companies to step into the earnings confessional this morning … and while it certainly didn’t hit Wall Street with its best shot this quarter, the drugmaker still looks relatively healthy despite its vaccine variability.
Let’s start with the good news: JNJ said first-quarter sales rose 5% from year-ago levels to $2.67 per share — beating expectations for $2.58 per share.
Revenue was nearly in line with Wall Street’s wishes, coming in at $23.4 billion versus the $23.6 billion anticipated.
The bad news, however, is that the drugmaker lowered its 2022 sales guidance by about $1 billion compared to its January estimate. According to CFO Joe Wolk, currency concerns were the reason behind the guidance cut as the dollar continues to gain strength.
Perhaps the bigger story to come out of JNJ’s camp is that it’s no longer giving any kind of sales outlook for its COVID-19 shot, which the company says is due to developing countries’ backlog of vaccines.
Mr. Wolk even went so far as to say it was “unusual to provide guidance for a specific product to begin with,” even though JNJ talked up its juiced vaccine sales the year prior, much to the Street’s delight.
It’s fun to imagine iPhones everywhere short-circuiting for a second following Wolk’s statement, seeing as iPhone sales predictions are the literal backbone of Apple’s (Nasdaq: AAPL) earnings performance every quarter.
Just wait until Tim Cook hears about this!
Better: A Toy Story
Toymaker Hasbro (Nasdaq: HAS) is having a banner day following better-than-expected revenue guidance, which the company says could hit the mid-single digits in 2022. This is compared to the low single-digit growth it called for previously.
Now, Hasbro hasn’t exactly had the best start to the year, with HAS stock down some 14% since January. Inflation and the Ukraine/Russia war have both put pressure on the Play-Doh and Monopoly king — with the latter costing Hasbro an estimated $100 million as it backs out of the Russian market.
Wait … Russians spend $100 million playing Monopoly? I don’t think you’re giving that enough attention!
The Russian/Ukraine war … not Monopoly. You know what? Never mind.
But that backpedaling isn’t halting Hasbro’s optimism — no siree! The toy titan says it can offset rising materials costs by subsequently raising the price of its products. And honestly, who’s going to complain when literally everything under the sun is getting more expensive?
Well … everything except for those giant AriZona tea cans, which somehow still cost just $0.99. (AriZona is the real MVP of this year’s inflationary mayhem, I tell you!)
Anywho. For their part, investors took Hasbro’s revenue roller coaster in stride and hiked HAS stock nearly 5% higher.
Best: Needham Say More?
A bullish note from investment bank Needham on the state of the semiconductor market and two of our Great Stuff portfolio picks? Why, don’t mind if I do!
The way Needham sees it, both Advanced Micro Devices (Nasdaq: AMD) and Nvidia (Nasdaq: NVDA) will be sheltered from ongoing supply chain issues better than their semiconductor brethren.
When it comes to Nvidia, the chipmaker has its hands in so many different cookie jars that it can ramp up production in one area of its business — like higher-value server and data center platforms — while lowering the priority of its PC graphics chips (which are facing tighter supply constraints). And all without missing a beat!
Meanwhile, AMD continues to astound investors with its dip into the data center swimming pool, as it aims to delve further into the enterprise and cloud markets. (We recently took a deep dive into AMD’s data center operations, which you can read up on here.)
Now, while I love a bullish bowl of chip news for breakfast, Needham’s upbeat outlook shouldn’t come as any big surprise to regular Great Stuff readers.
After all, we’ve been telling everyone who’ll listen — and let’s be honest, everyone who won’t listen — why AMD and Nvidia are the bee’s knees amidst this semiconductor supply squeeze.
But let’s say you’ve taken our advice and have a full plate … erm, portfolio of chip stocks already. Well, how’s about a side dish of crypto capers to spice up your meal:
Ian King says this Next Gen Coin is capable of powering a $100 trillion industry that’s more valuable than Apple, Amazon, Microsoft and bitcoin — combined!
And you can invest in it with as little as $20. Here’s how…
Speak of the coworking devil.
How long has it been since WeWork (NYSE: WE) weeble-wobbled into these here virtual pages? Not long enough… Thanks for that, Piper Sandler.
In case you missed it, WeWork finally made it to the public markets last October … as a SPAC, obviously, because one failed IPO was enough. Now another analyst has fallen for the “office space as a service” company’s ever-elusive hints at profitability.
Alexander Goldfarb initiated coverage on the stock at an overweight rating (essentially a “buy”) with a price target of $10.
You catch that? $10 per WE share. That’s about 69% upside from where WE be trading today. Nice.
And for what? For a company that’s still knee-deep in offloading overpriced office space? For a company that’s still, even with its rising desk occupancy, racking up insane net losses?
Back in our October 2021 dive, we pointed out that WeWork’s own investor materials stated it needs 70% occupancy just to reach profitability. That’s 70% of desks filled before WeWork starts making any real money … or generates returns for investors.
As our friend Goldfarb up there notes: “Desk utilization rates are now ~63% vs. COVID lows of 45%.”
Of course, WeWork and WeWork bulls have previously pointed toward a host of other cost-saving measures that could help, such as “restructuring” certain leases and cutting other leases altogether.
Therein lies the crux of WeWork’s post-pandemic position: You gotta reduce those ballooning expenses by cutting desks … or get more people in those desks, period.
Both. Both would be nice.
WeWork actually has been reducing its total number of global desks (weird measurement, I know). But now my question is … how much office space does WeWork have to cut for it to meet hybrid worker demand and reach that occupancy sweet spot? All while “deleveraging” its massive debt pile?
Ain’t nobody got time for that.
That’s why even the most optimistic analysts from Piper Sandler are looking out to 2024 for WeWork to get its act together … if the company doesn’t bleed itself dry before then.
I won’t go out and say WeWork’s path to profitability doesn’t exist … but it is a long, long, long winding path, with broken beer bottles and pop tops littered all over it.
And for all its “we’re elevating the world’s consciousness” talk, the company has fierce competition closing in fast from the likes of IWG and others.
I’ll hold my breath before believing “it’s different this time” with WeWork.
What do you think, Great Ones? Are any of you holding WE stock? Will WeWork be profitable by the time humans walk on Mars? What will office space look like five years from now? Ten years?
If you’ve got thoughts, we’ve got the curiosity to read them (yeah, let’s go with that). Spin the yarn with us over at GreatStuffToday@BanyanHill.com. Or simply make up your own questions and rant away.
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Until next time, stay Great!
Regards,
Joseph Hargett
Editor, Great Stuff