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Fuel Systems Solutions (FSYS)

Another way to play the trend: Fuel Systems Solutions, which has been around for more than 50 years and generates more than $400 million in annual sales. The stock has fallen more than 40% from its 52-week high to a recent $23 as the company's Italian operations took a big hit from the end of gas engine conversion subsidies from the Italian government. For 2011, sales are on track to fall about 5% to around $407 million. Yet analysts spy a rebound in 2012 as new markets in Asia and Latin America expand. Sales are expected to rise more than 10% to around $450 million and earnings per share may double to around $1.20. Fuel Systems is also gaining traction in the U.S. Those GM pick-up trucks, noted above, will be converted by Fuel Systems' IMPCO division.

Risks to Consider: Natural gas as a transportation source only makes sense in an era of pricey crude oil. If the price of oil falls back, perhaps to below $70 a barrel, then any momentum this nascent industry may have will be blunted.

Action to Take: These stocks are well off of their highs, in large part due to lofty growth expectations that have failed to materialize. Yet a move toward more natural-gas-powered vehicles in 2012 would quickly bring investor attention back to these lagging stocks. As oil prices move back higher, that becomes a rising possibility.

Disclosure: Neither D. Sterman nor StreetAuthority, LLC hold positions in any securities mentioned in this article.

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  • This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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