- CNBC's Jim Cramer recommended Linde and Cummins as two non-pure plays on the future of hydrogen energy.
- "The technology's not there yet — just too darned expensive for the moment — that's why I prefer the non-pure plays," the "Mad Money" host said in explaining his outlook on hydrogen fuel cells.
- "This whole industry's getting a major tailwind once the Biden administration takes over because the Democrats love alternative energy," he said.
CNBC's Jim Cramer on Monday endorsed two stocks as plays on hydrogen fuel cells in the current market environment.
While Cramer is convinced that hydrogen fuel technology, a frontier in clean energy, is the way of the future, he thinks there is a long runway before that future arrives.
"The technology's not there yet — just too darned expensive for the moment — that's why I prefer the non-pure plays, like Cummins ... or Linde," the "Mad Money" host said. "I'd be even more bullish on Cummins if we saw a national rollout of hydrogen fueling stations by an integrated oil company with lots of gas stations, maybe a BP or Royal Dutch, but that doesn't seem like it's on the horizon yet."
Cummins is a big engine manufacturing operation that's working on a hydrogen-based engine. Linde is an industrial gas distributor that counts hydrogen among its products.
Shares of Cummins are up almost 30% year to date and the stock price, which closed at $231.17 Monday, is about five points off its closing high. Cummins sports a price-to-earnings multiple of less than 22.
Linde shares are up 20% this year at $256.42, down from its peak close of $262.04 earlier this month. The stock has a price multiple of 61.
Nikola, which came under fire for a number of issues, saw shares fall 27% after General Motors announced a scaled-back partnership on Monday. Short-seller firm Hindenburg accused the company of making false statements about the company's truck, and the fallout from that and other turmoil surrounding founder Trevor Milton forced the company to shake up management.
Cramer is a fan of Plug Power, though he is recommending that investors refrain from buying the stock at these levels. The stock has rocketed more than 700% this year, closing at $26.39 Monday and cents away from its highs.
"Too much insider selling, not enough organic orders," Cramer said. "I believe in green hydrogen long-term, but it's hard not to think that this stock's gotten way ahead of itself."
The odds of expanding the use of alternative energy and unlocking a future of hydrogen fuel cells, however, are better after Jan. 20, when Joe Biden is installed as U.S. president, Cramer said.
"This whole industry's getting a major tailwind once the Biden administration takes over because the Democrats love alternative energy," he said. "But that doesn't mean these fuel cell stocks are automatic buys, in part because a more environmentally friendly White House is already baked in."