Top Three Picks for January 2021 (Plug Power)

You know how it feels when you wake up and see the vision in front of you about how you want your life to become, that's how I feel most of the days when I wake up at 5 or 6 in the morning. I look forward each day to do something productive even if it is small or big at least there is progress.

In line with this so called progress, I will be sharing my top three picks for every month starting this month about what stocks I have bought and I intend to buy soon. My choices depend on what's happening in the world, the current trend in the market and how I see things in the long-term. I'll start with the disclaimer that I am not a professional finance adviser (and I could be wrong with my speculations). Hence, it will be a buy at your own risk.

My top three picks for January 2021:

• Plug Power (NASDAQ: PLUG)

• Pfizer Inc (NYSE: PFE)

• General Motors (NYSE: GME)

So, now the question is why did I come up with this decision for choosing these three...

Let's start with PLUG!

What are the PROS?

New York Times veteran tech journalist Kara Swisher said, "The world's first trillionaire will be a green-tech entrepreneur'' and he made this statement a year before the outbreak of Covid-19. Because of the pandemic, it somehow hastens the transition to cleaner energy in which governments around the world are pushing for a green industrial revolution. There is a dramatic shift towards renewable energy and this means great opportunities for businesses related to this.

With President Biden in the government and his $2-trillion infrastructure plan (which contains a bold plan for a clean energy revolution), it aims to restructure the entire transportation sector with the use of new technology and alternative sources of energy. This means that the Electric Vehicle boom is in full swing!

This is where PLUG comes into play. Plug Power is a pioneer in hydrogen fuel cells. It is an alternative engine which uses hydrogen gas to create electricity to power an electric car with water as the only by-product. Aside from this, it also acquired two smaller companies specializing in production of the hydrogen which means that aside from producing the engine, they also produce the fuel itself!

As of this month, PLUG announced an alliance with South Korean industrial giant SK Group and the deal is expected to close before the end of the quarter. The South Korean company's investment into PLUG will amount to up to $1.5 billion and in exchange it takes a stake in the company. Both companies aim to provide hydrogen fuel cell systems, hydrogen fueling stations, and electrolyzers to the Korean and broader Asian markets. Noting about South Korea's ''Hydrogen Economy Roadmap through 2040'', the joint venture is on the right track to contribute to this roadmap of putting six million fuel cell vehicles on the road, establishing 1,200 refilling stations and producing more than 5 million tons of hydrogen annually to fill the filling stations. The South Korean government hopes to create a $40 billion ''hydrogen economy'' by 2040.

According to CNN Business, the current consensus among the 13 polled investment analysts is to BUY stock. According to their 12-month price forecast, the median target is $75 (with a high estimate of $88 and low estimate of $21).

What are the CONS?

Because of the current shift towards renewable energy, more businesses are betting on it. This means that PLUG is not the only player in the field. There will be more competition especially with other known rivals such as FuelCell Energy (NASDAQ: FCEL) and Ballard Power Systems (NASDAQ: BLDP) working its dent in the industry.

Also, in its 24 year long history, PLUG hasn't actually earned a profit. In my opinion, it could partly because renewable energy didn't receive much attention until now. Despite the presented conundrum, there is strong buy consensus rating.

What I think?

The phenomenon related to PLUG's stock is remarkable. There is a strong possibility that its shares could soar higher this year, or it could go in the opposite direction. It will always boil down to the company's report which means everything is a gamble. It all depends on the tolerance of risk. However, I am betting on the shift to a hydrogen economy and I am aware there is a long road ahead to prove or refute speculations.

My Progress...

I bought PLUG. Fortunately I did because price right now is at $63.78. I am looking into a high estimate of $88 as per CNN Business.

My next blog is about Pfizer and then General Motors.