Having been born and raised outside of Pittsburgh, I know
firsthand of the ravages of factory pollution.
My grandfather told me stories about the streetlights coming
on midday because of the amount of smog in the downtown area.
Many of the region's streams and rivers were void of life back in
the 1960s due to industrial waste deliberately and inadvertently
seeping into the waterways.
Things have improved greatly since those dark days. I have
fond memories of fishing local streams for pollution-resistant
fish like carp and catfish. Those same streams had been void of
life just a decade or so prior.
Today, many of these Pittsburgh streams hold healthy
populations of clean water fish like smallmouth bass and trout.
This is a great testament to the success of the U.S.
environmental movement, as well as commercial firms dedicated to
Personally, I like it when the free market helps improve the
environment. It's a great feeling to be able to earn a profit by
doing a good thing for the environment.
The free market has spawned firms like Illinois-based
, which specializes in pollution reduction technology. Not only
do the company's products help mitigate the negative effects of
industrial pollution, its shares are setting up to be a great
buy. Let's take a closer look.
Founded in 1987, FTEK provides boiler optimization and air
pollution reduction technologies to global industry and
utilities. In addition, the firm's FUEL CHEM products improve the
efficiency, reliability and environmental status of combustion
units. It has a market cap of just under $132 million.
The company posted strong third-quarter results Monday after
the close, with revenue climbing 35% year over year to $33.6
million. Operating income shot from $1.6 million in the year-ago
quarter to $5.3 million this quarter, and net income advanced to
$3.5 million from $1.2 million. More domestic projects and a
large contract in Chile pushed revenue from the air pollution
) segment higher by over 50%.
President and CEO Douglas G. Bailey stated, "Higher revenues,
improved consolidated gross margins, and increased profits for
the 2013 third quarter were driven by a favorable mix of domestic
and international APC projects, as well as steady contributions
from FUEL CHEM. We also ended the quarter in a strong financial
position that included $1.05 per share in cash, and a very modest
He continued saying, "Our business development efforts
continue in earnest, and we are currently pursuing a number of
large project awards in the U.S. and overseas. We continue to
focus on broadening our international presence, especially in
China, and addressing domestic opportunities driven largely by
state consent decrees and other mandates. We also remain
committed to investing in R&D and pursuing licensing
opportunities as a means to enter new markets and build upon our
In addition to the CEO's enthusiasm for growth, the company
has a backlog of $33.4 million and working capital of $46.4
million. I think this all equates to a powerful investing
As you might imagine, the great Q3 results created a gap up on
the price chart. Shares jumped from $4.60 to around $5.60 on the
news. FTEK is a very low volume stock, and the gap up has my
technical analyst side a little concerned. Although everything
appears fundamentally solid, waiting for shares to break out
above $5.81 is warranted.
Action to Take -->
-- Buy FTEK above $5.81
-- Set stop-loss at $4.97
-- Set initial price target at $7.43 for a potential 28% gain in
This article originally appeared on ProfitableTrading.com:
Low-Priced Stock Could Make You Double-Digit
Profits As It Saves The Planet