Plug Power Inc (NASDAQ:PLUG)

jerd71

The company is a rare pure play in the hydrogen fuel cell market. It develops, manufactures and markets these alternative energy systems.

The stock started moving higher last year when Amazon invested in the company, locking in the rights to buy up to 55.3 million shares of PLUG.

That's a perfect "starter position" for a buyout firm like Amazon. Its relatively small stake lets Amazon check out PLUG’s operations and evaluate the business.

If it likes what it sees, it would make natural sense for Amazon to buy out the rest of the company. It could then help PLUG better compete with CMI, which clearly has a head start in the fuel cell business.

Now our One Day Bonus Indicator has picked up on some unusual action in the options market surrounding PLUG’s stock shares. This typically coincides with a buyout transaction being discussed behind closed doors.

This tells me there's a high degree of likelihood that Amazon is using PLUG’s recent pullback as an opportunity to make an attractive buyout offer.

When CMI bought out Hydrogenics, it paid a 100% premium for the deal to go through — and that seems to be the going rate for innovative companies in this industry right now.

So our buyout target for PLUG is also double its current price — about $10 a share.

Since we’re talking about a cutting-edge technology in an industry that's perfectly matched to today’s environmental concerns, I expect a takeover to happen very soon. So you'll want to get your PLUG buyout play in place before a deal is announced!