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Investors drove Ballard Power Systems Inc. and the rest of Canada's alternative energy stocks to new 52-week lows yesterday, extending declines that began in May after a failed rally.

"It's largely the changing psychology of the market," said Rich Morrow, an analyst at CIBC World Markets in Toronto. "Things that can't be measured in conventional metrics of revenues, earnings, etc., are being scrutinized with greater detail than they had been previously."

Ballard fell to $41.65 yesterday on the Toronto Stock Exchange, down $2.85. The stock has lost $50.10 or 54.6 per cent since mid-May. It is off 78.3 per cent from its March, 2000, high of $192 and is at its lowest level since Dec. 31, 1999.

Smaller power technology companies are also under pressure. Global Thermoelectric Inc. of Calgary, down 60 cents to $7.90 yesterday, is at its lowest level since November, 1999.

Toronto-based Electrofuel Inc. closed at $2.98, its second-worst finish since going public in November, 2000.

Mr. Morrow cut his Ballard rating to "hold" from "strong buy" in March and slashed his 12-month target to $65 from $140. The $65 target and his earnings estimates are under review once more. It's just not certain, he said, when Ballard products will become commercially viable, and his outlook reflects the view that it may take longer than once thought.

"People have been rattled in their sense of their ability to predict the future, particularly long-range future," Mr. Morrow said. "It's the type of market that wants to see tangibles. As these tangibles emerge, I think we'll see the sector come back -- but that could be a long time."

Burnaby, B.C.-based Ballard develops fuel cells for various uses, including as a way to power automobiles. The technology pollutes far less than conventional engines or power generators. General Motors Corp. recently announced that it, too, is making fuel-cell progress, news that further shook Ballard stock. Ballard works with Ford Motor Co. and DaimlerChrysler AG,the two other Big Three auto makers.

While vehicles powered by fuel cells are not expected on the road en masse until at least 2010, Ballard says a portable fuel-cell power generator, produced by the Coleman Powermate division of Sunbeam Corp. of Delray Beach, Fla., will hit the market by year-end using Ballard technology.

Ballard reported second-quarter earnings last week. Revenue more than tripled to $14.9-million, a quarterly record, but the company's loss widened to $41-million or 45 cents a share from $18.6-million or 21 cents a year earlier.

According to Kip Smith, president and chief operating officer, the company increased research and development spending to push its portable generator to the market. Coleman and several other equipment makers received 155 pre-production fuel-cell power units during the quarter.

James David, a UBS Warburg analyst in Montreal, said the Coleman generator will turn the tide for Ballard stock, producing a "meaningful rally" late this year and early next.

"We have yet to see a meaningful weeding out of the winners and losers [in this sector]" Mr. David wrote in a note to clients after the earnings report.

"[Ballard]has long been considered the fuel cell industry leader, largely on the back of its extensive history, advanced technology and unparalleled record of product field testing. We believe the company is poised to take its evolution to the next stage . . . and this will sharply differentiate it from the rest of the market."

He rates the company "buy" and has a 12-month target of $185.

According to Bloomberg News, more than half of the 26 analysts who follow the company rate it "hold." One rates it "sell."

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