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Pioneer Power Solutions Soars Again Premarket, Should You Buy?

Tim Worstall
Tim Worstall trader
Updated 30 Nov 2021

Pioneer Power Solutions (NASDAQ: PPSI) has soared again premarket. This is off the back of renewed interest in their portable EV power solutions. Pioneer Power is up 40% in that premarket pricing which is a further extension of the extreme volatility of the stock price. 

The company itself is a small producer of varied electrical power equipment. Revenues are low – $5.7 million last reported quarter – and primarily rely on sales of the company’s switchgear. The effect of such a small revenue stream is that the prospects of a new product have a significant effect upon possible future revenues.

It’s that new product line which is driving interest in the stock at Pioneer Power. They’ve announced a series of portable EV chargers. One on a truck, a larger more adaptable one on a trailer, and so forth. Then at the end of the range, a stationary but easy to install version – getting around the inability or perhaps just plain dislike of some utilities to install the necessary power line upgrades to a more conventional charging station – to fill in below the standard and current market offerings.

The point of all of these chargers being that they seem to be plain diesel generators that are made either mobile or solve that installation problem. This is a lot more sensible than the joke this might sound like. Near everyone with a gasoline-powered car has run out of that gas at some time or another. Yet the solution there is simple enough – hitch to a gas station and come back with a gallon can. This cannot be done with an electric vehicle – the power source must come to the car. Emergency diesel generators on the back of a truck, therefore, do make perfect logical sense.

On the back of the announcement of this line the Pioneer Power Solutions stock price has jumped from its $3 and $4 level over the fall and summer to over $10 in one leap three weeks back, a fade back to $5.80, and then a leap to yesterday’s mid $7s and a further premarket jump of 30% and more to this morning’s over $10 again. This is a febrile market, one with lots of price volatility.

Price volatility is, of course, the meat and drink of a trading strategy. Being positioned the right way for the price movement to come is how money is made in markets. 

It’s possible to think either way about this idea of course. That someone will run such a roadside service is obvious, but how many and how much such equipment will they need? If this becomes as common as a tow truck then the market is vast – if it’s something rarely seen or used, even if it exists, then the interest will fade. ~But then that’s what the process is about, taking a view on who will succeed with what addition to the marketplace.

The one thing that seems between likely and certain is continued volatility in the price of Pioneer Power Solutions – a trading opportunity, therefore.  

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Tim Worstall
Tim Worstall is a freelance writer specialising in economics and the financial markets.