Accounting Issues? No Problem for this Beloved Power Company

Shares of Plug Power (PLUG) took a steep dive last week, as the company announced it needed to restate some of its prior years of accounting.

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  • However, that hasn’t stopped analysts from looking beyond the short-term fears. They continue to see long-term opportunity. In fact, one analyst from B. Riley cites the old mantra of buying “when there’s blood in the streets,” even though shares only pulled back about 8 percent on the news.

    While shares are now down just over 50 percent from their 52-week high of $75.49, shares are still up nearly 1,100 percent in the past year. The hydrogen fuel cell company is a key player in the electric vehicle (EV) space.

    Action to take: Shares are nearing oversold levels following their hefty decline since February. While not quite oversold yet, share haven’t yet moved under $35. That’s a level that shares last hit in March as the tech stock selloff reached the bottom of the move before trending higher.

    While shares are overpriced on conventional metrics, investors who buy here can likely multiply their wealth in the years ahead as the EV space continues to head higher. And on any financial restatement, share will likely pop higher right away.

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  • For traders, the nearly-oversold conditions here are ripe for a long-side trade. The September $65 calls last traded for about $3.60, and could deliver returns into the low triple-digits on a move higher in the next few months.