Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Shale Natural Gas, Oil and NGLs and ESA -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (1275)	8/16/2009 7:35:22 AM
From: jrhana	1 Recommendation Respond to of 6160

Buy Fuel Systems Solutions? cnbc.com Posted By:Tom Brennan Topics:Natural Gas \| Stock Picks \| Stock Market Companies:Fuel Systems Solutions Inc A natural-gas subsidy bill is working its way through Congress, Cramer told viewers Thursday, that could jump-start the commodity’s use here in the US. Fuel Systems Solutions would be a big beneficiary if the legislation were passed. Of course, Cramer made a similar call a year ago when Fuel Systems Solutions [FSYS 31.95 1.50 (+4.93%) ], which makes the components that allow vehicles to run on nat gas, was trading at $36.50. He expected Congress to take up the cause, but lawmakers balked instead. Then FSYS plummeted to under $10 a share. So what’s different this time? * Will Congress Subsidize Natural Gas? * Cramer's Top Pipeline Play * The Best Natural-Gas Stocks Right Now For one thing, the natural-gas lobby seems to have finally poured money into lobbying Washington. The related companies are making their presence known, and that makes it harder for Congress to ignore them. Cramer said he thinks this is one reason the stocks have been soaring even though the commodity’s price has been trending lower. If passed, the NAT GAS Act, as it’s called, would extend the tax incentives for those who installed nat-gas refueling pumps by 18 years, double the tax credit for liquefied nat-gas trucks, create a tax credit for companies that produce nat-gas vehicles and require half the vehicles that the federal government produces to run on the fuel. All of this would translate into an increase in business for FSYS, especially considering just 0.5% of American vehicles run on natural gas. Here’s the back-up plan, though: If Congress balks a second time, then at least Fuel System Solutions has a strong European base to pick up the slack. The European Union has already increased incentives for updating older vehicles to run on natural gas, and the EU is demanding new strict emission standards. So that should spur even more conversions. FSYS is cheap right now, trading at just 15 times 2010 earnings despite a 22% long-term growth rate. Cramer said that fund managers would be willing to pay 22 times earnings, making this a $43 stock masquerading as a $30 name. And that’s without NAT GAS Act making it through Congress. That makes this a “strong but very speculative buy,” he said.