Among the biggest winners in Thursday's early trading are
Clean Energy Fuels (Nasdaq: CLNE)
,
Westport Innovations (Nasdaq: WPRT)
,
Sprint (
S
)
and
Titanium Metals (
TIE
)
.
|
Top Percentage Gainers -- Thursday, May 13,
2010
|
|
Company Name (Ticker)
|
Intra-Day Price
|
% Gain
|
52-Week High
|
52-Week Low
|
| Sprint (
S
) |
$4.46 |
+7.5%
|
$5.94 |
$2.78 |
| Clean Energy Fuels
(Nasdaq: CLNE) |
$17.75 |
+5.5%
|
$23.70 |
$7.37 |
| Titanium Metals (
TIE
) |
$17.73 |
+3.9%
|
$18.15 |
$7.16 |
| Westport Innovations
(Nasdaq: WPRT) |
$19.70 |
+2.1%
|
$20.44 |
$4.93 |
| *Table
includes companies with minimum market capitalizations of
$200 million and three month trading volumes of at least
100,000 shares. All percentage returns are listed as of
12:18PM Eastern Standard Time. Click on ticker symbols for
up-to-the-minute price quotes and percentage gain data. |
A Belated Boost for Natural Gas
When it became apparent a few years ago that the United States was
sitting on far larger quantities of natural gas than was previously
thought, many questioned why we weren't all driving gas-powered
cars. After all, natural gas is far cheaper than oil, and emits
fewer carbon emissions than gasoline. Right now, the
Honda (
HMC
)
Civic is the only factory-built gas powered car for sale, and is
available in only a few states.
Well, a pair of Senators just offered a bill that would stimulate
demand for higher natural gas consumption. Their bill would double
the credits available to convert fleets to run on natural gas,
which would be a sure boost to
Clean Energy Fuels (Nasdaq: CLNE)
, which is up more than +5% in Thursday trading.
The snapback comes a week after Clean Energy's shares slumped on a
disappointing quarterly profit report. Clean Energy has been
quickly moving to build dozens of natural gas fueling stations, but
has yet to generate much profit from that rising base of stations.
You can blame part of it on falling natural gas prices. In its most
recent quarter, the company pumped 56% more gallons of natural gas
than in the prior year's quarter, but total sales rose only 30%.
And despite the spike in volume, earnings before interest, tax,
depreciation and amortization (EBITDA) still totaled less than $1
million for the quarter. The challenge for Clean Energy is to find
a way to expand margins as its volumes grow. That might prove to be
quite a challenge, especially if traditional gas station operators
enter the fray on the heels of this promising legislation. You may
want to wait for another pullback in this name, even if you are a
believer in this business concept.
Or you can check out
Westport Innovations (Nasdaq: WPRT)
, which saw its shares spike aggressively on Monday in anticipation
of the legislation. Westport has partnered with major truck engine
manufacturers such as
Cummins (
CMI
)
, Kenworth, Peterbilt, and Volvo to modify traditional truck
engines to run on natural gas. Demand is strong: sales rose +24%
above year-ago levels in the December quarter, and are expected to
have risen more than 40% from a year ago when March quarterly data
are released.
The logic for using natural gas to power trucks is even more
apparent considering their high levels of energy consumption and
outsized emissions of carbon gases. But as was the case with Clean
Energy Fuels, Westport Innovation has not yet grown large enough to
be sustainably profitable. Perhaps the pending legislation will
help it get over the hump. But with both of these stocks, they
could just as easily fall back as they could rally. You may want to
pick an entry point target and wait for it.
------------------------------------
Sprint Inks Another Partner
You've got to hand it to
Sprint Nextel (
S
)
. After the wireless service provider saw its rivals such as
Verizon Wireless (
VZ
)
and
AT&T Wireless (
T
)
pull away, it has resorted to a never-ending stream of moves aimed
at taking back market share . First, it merged with Nextel, though
that deal proved to be a disappointment. Then it became a big
backer of
Clearwire (
CLWR
)
, which aims to provide broadband speeds for wireless data. (The
jury's still out on that one). Then it acquired the customer base
of Virgin Mobile, which appears to be a winning move. And now,
Sprint is developing a low-cost co-branded service with
Wal-Mart (
WMT
)
. Not a bad move considering that Wal-Mart's target demographic has
the lowest rates of wireless usage.
Investors like the deal, bidding shares up more than +7% in
Thursday trading. And they should. Sprint is sitting on ample
unused network capacity, so any of these deals does not need to
force the carrier to make major network enhancements. The proof
will be in the pudding. Sprint execs maintain that better network
utilization should yield sharply rising operating cash flow in
coming quarters. Sprint's bulls say that considerable progress has
been made on that score, and bandy about $6 price targets. Others
question why the company targets the most financially-stressed
consumers with its myriad pay plans, and think shares are worth
closer to $3. Then again, if unemployment drops steadily, then the
newly-employed are likely to find Sprint's value-oriented pricing
plans to be appealing.
------------------------------------
Goldman Boosts Titanium
Last week, we suggested that
Titanium Metals (
TIE
)
could be in for an extended run (though we caution that investors
shouldn't expect shares to rebound to the $40 levels seen back in
2006). Shares are in fact still running, up nearly +4% Thursday
thanks to bullish comments from
Goldman Sachs (
GS
)
regarding all steel stocks. Signs of life continue to re-appear in
the moribund industrial sector, and you can expect solid quarterly
results from Titanium Metals to keep reflecting that. A break-out
into the $20s in coming weeks is looking increasingly likely as
analysts take up their global industrial output forecasts.
-- David Sterman
Contributor
StreetAuthority
Disclosure: David Sterman does not own shares of any security
mentioned in this article.