Clean Energy Fuels (CLNE) is having a terrible time in 2014. The natural gas supplier's shares have dropped almost 20% so far this year. However, is this an open door for investors, considering the normal development of natural gas vehicles? The likes of Westport Innovations (WPRT) are making solid moves to increase the appropriation of natural gas vehicles with new, high-fueled engines.
A solid infrastructure
Clean Energy has 96 truck-accommodating energizing stations open, which is four times its closest rival. It has increased its gallons-conveyed volume by around 10% on a yearly basis. In addition, administration is to a great degree focused on getting the organization to profitability. Clean Energy has effectively sent funding to manufacture station infrastructure and scale up its capabilities. It is focused on being disciplined with its cashflow to adjust its investments to the development of the business sector.
The release of the Cummins Westport 12-liter motor has pushed the sales of substantial obligation trucking to start the transition to natural gas energizing. Furthermore, Westport as of late propelled another spark-touched off natural gas 3.8l turbocharged motor offering the Westport Wp580 Engine Management System for the North American market. This motor administration system is slated to think that its route into Indian auto organization Tata Motors' (TTM) 5.7-liter motor that targets medium-obligation truck applications.
So, this move will open up a huge business sector for Westport to improve its business later on. Furthermore, the presentation of more natural gas vehicles will offer rise to the requirement for additionally filling infrastructure, and this is the thing that Clean Energy provides. Notwithstanding the new motor accessibility, the presentation of new natural gas sleeper taxicab options from Kenworth and Freightliner at the Mid-America Truck Show in March is an alternate catalyst for Clean Energy.
Clean Energy's customer accounts are also increasing at an impressive pace. Kroger (KR), the nation's largest basic supply retailer, has chosen to enter into a partnership with Clean Energy to change over its vast armada to natural gas.
Customer reception is quickly increasing
Kroger's trucks are made to serve its system of stores, and are required to use 1 million gallons every year. Also, Clean Energy signed an agreement with EPES Transport Systems, one of the favored carriers for Lowe's (LOW) home-change centers.
Further, it signed on Cardenas Markets, a California-based supermarket chain for a request of 15 CNG trucks, alongside their energizing all through its Southern California system to serve their stores in the district.
Saddle Creek is an alternate extremely paramount customer for Clean Energy. It as of now operates one of the largest fleets of CNG trucks in the nation with in excess of 115 trucks in their armada, and has proclaimed to increase the armada to in excess of 200 inside a year.
Clean Energy also supports (UPS) and its developing armada of natural gas trucks. It right now fuels 230 UPS trucks every day at nine of its stations across the nation. Further, Clean Energy plans on filling 15 extra substantial obligation UPS trucks at its stations in Jacksonville, Florida, and Los Angeles.
Clean Energy is also seeing strong development in transit, refuse, airports, and armada services. A couple of months, prior it was granted the operations and support contract of the four CNG stations it assembled for Dallas Area Rapid Transit. These stations energized in excess of 1.3 million gallons in the first quarter of this year. DART is as of now operating something like 186 CNG busses and 112 light-obligation CNG vehicles, and expects to take conveyance of an alternate 185 CNG busses amid the second quarter.
Additionally, customers in Las Vegas have requested in excess of 100 new CNG vehicles, including 40 limousines and dark cars for MGM Resorts (MGM) and 65 new taxies and busses from Bell Transportation. These will also drive development for Clean Energy's open stations. Ringer right now operates 180 natural gas vehicles and expects to have in excess of 300 in its armada before the year's over.
Albeit Clean Energy is still unprofitable, the organization has strong prospects going ahead. First, the quick development expected in the natural gas vehicle business sector is going to be a huge catalyst for it. Next, Clean Energy is also seeing a fast increase in reception rates and it has a strong infrastructure. Clean Energy's bottom line is required to enhance at a marvelous pace of 25% for the following five years, more than triple of the industry's normal. Subsequently, investors should consider purchasing it on the pullback.