Vision Hydrogen Corporation (OTCMKTS: VIHD) is a renewable energy company with a primary focus on developing clean hydrogen production facilities which supply clean hydrogen to manufacturers and gas and power traders. They also work with consumers in the industrial and heavy and marine transportation sectors.
Earlier this month, Vision Hydrogen Corp started a steady—and rapid—climb up the market, from $5 on Monday Oct 31 to a closing price of $10.00 by Friday, November 4. Although the stock is thinly traded, Friday's dollar volume increased by 25% to $1.7 million. This is only the most recent action from the same stock that shot up from $2.50 in December 2020 to upwards of $50 within the next month.
Now known as Vision Energy Corporation (OTCMKTS: VIHDD), the stock is currently trading at $14.79 with a market valuation of $420M.
Strategic Stock Split Should Boost Shares
This recent—and dramatic—shift in momentum came after the energy company announced the approval of a 1 for 2 stock split on November 7, 2022. The declaration also included the intention to change its name from “Vision Hydrogen Corporation” to “Vision Energy Corporation.”
As of on November 8, then, Vision Energy Corporation common stock is now currently trading under the ticker symbol VIHDD, designating the forward split, for the first 20 days. Effectively, then, by the end of the month, they will receive a new ticker symbol.
For now, we know the company's common stock new CUSIP number is 92837Y200. This Forward Split results in an increase in outstanding common shares, from 21,048,776 to 42,097, 552. It will also increase double the number of authorized shares, to 200,000,000.
Expanding Hydrogen Operations Shows Promise
At the same time, Vision Energy Corporation also offered an update on their pioneering Green Energy Hub project in the North Sea Port of Vlissingen, the Netherlands. Through Vision Energy's wholly-owned subsidiary, Evolution Terminals BV, has now reached the advanced stages of planning for both construction and the delivery of Northwestern Europe's first import, storage, and handling terminal designed exclusively for hydrogen carriers, renewable energy products and low-carbon fuels.
The substantial redevelopment will allow Evolution Terminals to adopt industry-leading sustainable operating practices to reduce emissions from terminal activities. It will also introduce a green and renewable energy business model to the Netherlands at an opportune time.
Why Split the Stock Now?
On April 1, 2017 VIHD hit a historical high of $32.50 only to IMMEDIATELY plummet back to a new low of $5.207 on November 01, 2018. The stock made a quick rebound and peaked, again, at $11.50 on January 1, 2018. It hit a bit of a plateau at $10 before another slide and bounce and then flattened out to around $2.05 through the second half of 2020. Fortunately, the stock shot up to $14.75 by the end of that year, only to begin another decline to reach its most recent low of $2.375 on September 1, 2022.
Net income has been negative for a majority of the company's operations. This is particularly notable because net income went from -$478.4K in 2016 to +$8.9K in 2017 and then fell back down to -$554.0K in 2018. This translated to Earnings Per Share (EPS) of -$0.17, $0.00, and -$0.07, respectively.
At the same time, revenue has been increasing: from 20.9k in 2016 to 7.5M in 2018. Gross income from operating expenses also increased from 418K to 2.0M between 2016 and 2017, but then settled at 1.8M in 2018.
Observing all of this, it makes sense that Vision Hydrogen considered a split. With the decline, they've seen the last year this could give them a fresh start.
A Complicated Position in A Complex Industry
Moving forward, it is difficult to say how VIHDD will perform against its peers and competitors but its current state certainly implies the stock has a lot of room to grow. Yes, its current value is still around $15—basically, the historical high for the [new] stock—which is significantly better than the recorded historical low ($1.25); indeed, the year-to-date is up +224.32%.
However, these are probably the only positive values for VIHDD right now, especially when compared with companies like NextEra Energy (NYSE: NEE) and The Southern Corporation (NYSE: SO). NextEra ($81.61; +4.36%) is the largest electric utility holding company in the United States, including both fossil fuels as well as green energy like wind and solar. The Southern Company is a more traditional fossil-fuel-based electrical company (which Forbes has recently named the “2nd best Large Employer in America”)
Neither of these companies is having a stellar year, as NEE and SO are down -16.24% and -7.49%, respectively, on the year so far. That said, analysts have some positive expectations, suggesting upsides of around 19% for both energy companies. Furthermore, Southern has a Price-to-Earnings ratio (P/E) of 20.18; NextEra's is roughly double that. These are also particularly excellent metrics, especially when compared against VIHDD's current—and, let's remember, limited—P/E of -45.42. Finally, both NEE and SO have favorable Return-on-Equity metrics—around 12.25% each—while VIHDD's RoE is currently -391.22%.
By comparison, though, other hydrogen stocks are also down, despite the promise that hydrogen offers for the future of energy. Ballard Power Systems (Nasdaq: BLDP), Plug Power (Nasdaq: PLUG), and Bloom Energy Corp (NYSE: BE) are also all on an upswing from recent lows, hoping to recover their once-great heights.
At the end of the day, though, VIHDD gets a BUY rating, mostly because the split gives it more opportunity to grow; and the evidence suggests it will continue to do just that.
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