Perilous Reversal Watch: Clean Energy Fuels (CLNE)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Clean Energy Fuels ( CLNE) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Clean Energy Fuels as such a stock due to the following factors:

  • CLNE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $16.2 million.
  • CLNE has traded 332,141 shares today.
  • CLNE is down 3% today.
  • CLNE was up 8.9% yesterday.

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More details on CLNE:

Clean Energy Fuels Corp. provides natural gas as an alternative fuel for vehicle fleets. It designs, builds, operates, and maintains fueling stations. Currently there are 2 analysts that rate Clean Energy Fuels a buy, 4 analysts rate it a sell, and 4 rate it a hold.

The average volume for Clean Energy Fuels has been 1.5 million shares per day over the past 30 days. Clean Energy has a market cap of $922.9 million and is part of the utilities sector and utilities industry. The stock has a beta of 1.53 and a short float of 24.2% with 11.61 days to cover. Shares are down 13.2% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Clean Energy Fuels as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, generally high debt management risk and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 638.6% when compared to the same quarter one year ago, falling from -$3.87 million to -$28.59 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CLEAN ENERGY FUELS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for CLEAN ENERGY FUELS CORP is rather low; currently it is at 24.82%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -30.01% is significantly below that of the industry average.
  • The debt-to-equity ratio of 1.27 is relatively high when compared with the industry average, suggesting a need for better debt level management. Despite the company's weak debt-to-equity ratio, the company has managed to keep a very strong quick ratio of 3.69, which shows the ability to cover short-term cash needs.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 27.93%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 650.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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