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Powerhouse (PHE) Share Price Has Risen 25.6% in 5 Days. Is It a Buy?

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Updated 13 Jul 2022

Key points:

  • The Powerhouse Energy share price has risen 25.6% in 5 days.
  • The company today unveiled a new JV agreement with HUI.
  • Investors largely ignored the significance of today’s announcement.
  • So, are PHE shares a buy? Read on to find out.

The Powerhouse Energy Group PLC (LON: PHE) share price has risen by 25.6% in 5 days after bottoming at a crucial long-term support level that was tested in May and held. The level has existed since May 2020, with PHE shares trading above it.

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Also read: 5 Best Environmentally Friendly & Ethical Green Stocks.

The PHE share price was trading up 3.43% at writing after the waste-to-energy company announced a new joint venture agreement with Hydirgen Utopia International Plc to develop a waste-to-hydrogen energy project at Lanespark in Co.Tipperary in the Midlands in Ireland.

According to the Heads of Terms agreement, Powerhouse Energy will pay Hydroegn Utopia £400,000 in cash to identify the project site and its potential and to negotiate a deal with the current owners.

PHE will also advance a £600,000 loan to HUI, which will be available for drawdown immediately. The proposed plastic-to-hydrogen site will be built on a site currently leased to Trifol Resources Limited (TRL), which HUI invested in earlier this year.

The funding promised to HUI by Powerhouse Energy is contingent on the current landowners providing the joint venture with a viable title to the land on which the JV will build the plant. HUI is negotiating with the freehold owner and is confident it will meet this requirement.

Today’s agreement between the two companies also led to the dissolution of all previous contracts, with the latest agreement superseding any previous arrangements.

Investors barely reacted to today’s announcement despite its significance. Unlike the previous agreements signed between Powerhouse Energy and HUI, today’s agreement is the most significant for multiple reasons.

First, the project’s location can benefit from EU financing for sustainable energy projects. The area also has adequate feedstocks; hence, the project will always have enough waste to generate hydrogen power. Finally, there is also significant offtake potential since the hydrogen energy generated can be sold in the EU and the UK.

The project’s completion would make it PHE’s first operational full-scale waste plastic to hydrogen facility outside the UK. The two companies are excited to start working on the project.

So, should you buy PHE shares? Unfortunately, the answer is not right now. The best opportunity to buy PHE shares is if they break above the 2.50p resistance level or fall back to the 1.63 support level.

*This is not investment advice. Always do your due diligence before making investment decisions.

The PHE share price.

Powerhouse Energy share price 13-07-2022
Source: IG

The Powerhouse Energy (PHE) share price has risen 25.55% in the past five days. Will it keep rising?