This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Crunching the Fracking Numbers

NEW YORK (TheStreet) -- Investing in companies that produce fuels from the process known as fracking or from the manufacturing of components that allow engines to be powered by these fuels accelerated with the stock market bottom of March 2009. This process has slowed since March 2012, but appears ready for a resurgence this year.

My interest in this subject began from a recent presentation by Mike Jackson, chairman and CEO of AutoNation (AN), at the 2014 University of Tampa Fellows Forum. After hearing his presentation and reading comments from industry experts I think the industries producing natural gas from fracking and building engine components that allow heavy-duty trucks to be powered by these fuels needs a second look by investors.

Clean Energy Fuels (CLNE - Get Report) ($9.48, down 26.4% YTD) is building fueling stations around the nation to provide both compressed natural gas (CNG) and liquefied natural gas (LNG) and delivers these fuels directly to trucking companies, airport shuttles, taxi services, trash collectors and public transportation facilities.

The company expects cities across the country to make the switch to service vehicles fueled by CNG to save fuel costs and clean the air. Natural gas can cost up to $1.50 less per gallon than gasoline or diesel, and, according to the company, "reduces greenhouse gas emissions up to 30% in light-duty vehicles and 23% in medium to heavy-duty vehicles." Note that nearly all natural gas consumed in North America is produced domestically.

Clean Energy reported quarterly earnings report on Feb. 27 and missed analysts' estimates of earnings per share by 4 cents for a loss of 31 cents a share. The company also announced that gallons of fuel delivered rose 13% during the fourth quarter of 2013.

The stock has had a volatile trading pattern since bottoming at $3.23 in November 2008. The hype of the expanded use of natural gas to power vehicles resulted in a strong rally to $23.70 in April 2010. Delays in the process resulted in a downward move to $9.02 in October 2011. Renewed speculation fueled a rebound to an all-time intraday high at $24.75 in March 2012. Looking at the weekly chart this spike higher looks like a parabolic bubble that popped and the stock has been below its 200-week simple moving average since October 2012 with this average now at $13.81.

Must Read: Jim Cramer's Stop Trading: PAY

Prompting investor interest is the 2014 decline to as low as $8.27 on Feb. 28 in reaction to the earnings miss. Our 'Crunching the Numbers' table shows that the stock is below all five moving averages. The weekly chart is negative but oversold with its five-week modified moving average at $10.13. My weekly value level is $8.21 with a monthly pivot at $9.84 and semiannual risky level at $11.55 which is the first upside target on a weekly close above the five-week MMA. A higher semiannual risky level is $18.91.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CLNE $2.86 0.00%
WPRT $2.46 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs