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This FTSE 250 progress share has been rocketing like no different recently — up 421% within the final six months. Astonishing growers like this one often solely seize consideration after the primary motion, but it nonetheless appears to have gasoline within the tank after leaping 40% in November. That makes it one of the best performer on the entire FTSE 250. Once more. The inventory in query is Ceres Energy Holdings (LSE: CWR). The query now’s apparent – can it preserve doing this?
My very own portfolio is constructed round FTSE 100 shares, however I’ve been looking out for a smaller, faster-growing firm, and Ceres is an astonishing stand out. Naturally, that additionally ramps up the chance.
Ceres shares have the ability
It’s a British clear vitality expertise chief specialising in strong oxide gasoline cells for hydrogen manufacturing and environment friendly energy technology. Its tech places it on the forefront of the decarbonisation push, with the potential to deliver inexperienced hydrogen manufacturing prices nearer to fossil gasoline ranges in a couple of years.
The story gathered momentum up on 28 July when its South Korean accomplice Doosan Gas Cell started mass manufacturing of strong oxide gasoline cell methods utilizing Ceres’ proprietary expertise. That was a significant milestone for the partnership and recommended that Ceres’ tech is prepared for severe business use. Analysts count on royalty funds from Doosan to construct in 2026.
Then on 5 November, Ceres signed a producing licence settlement with Weichai Energy, a worldwide tools producer based mostly in Shandong, China. The deal provides Ceres an additional foothold in Asia-Pacific and will velocity up business deployment due to Weichai’s familiarity with the expertise. At the least one additional licence accomplice is anticipated subsequent yr.
Funding dangers and rewards
The potential rewards are large and there’s an AI hyperlink too, as Ceres goals to match energy-hungry knowledge centres with versatile and greener energy options. With a market cap of simply £710m, the chance right here might be enormous.
Nevertheless, buyers must be courageous to think about shopping for at the moment after such a robust run. Progress shares can construct momentum of their very own till all the pieces goes south. Ceres seems to be fully binary. Both the tech scales efficiently, the licences multiply, and royalties circulation, or some hitch derails all the pieces. Additionally, offers with Chinese language corporations carry threat, significantly round mental property. Many Western corporations now struggle shy of the nation.
I believe somebody investing at the moment ought to watch for brand new licence offers and the primary royalty revenues from Doosan and others. That’s when this share might transfer from a speculative spike to an actual earnings story. It’s not for the faint-hearted.
Buyers would possibly contemplate shopping for at the moment, all of it is dependent upon their urge for food for threat. However they have to additionally settle for that the massive positive aspects could have already been made, and the scope for giant potential losses if the shares retreat. It’s all an excessive amount of for me. I’m arriving to this occasion simply too late. For now, I’ll sit on the sidelines and watch.
