Clean Energy Fuels: Buy for Big Gains

Clean Energy Fuels (CLNE) announced first quarter ended March 31, 2016 total revenue of $95.8 million, up 12 percent year-over-year from $85.8 million during the same period last year.

Clean Energy declared first quarter of 2016 adjusted net income of $5.25 million or $0.05 per share compared to adjusted net loss of $29.24 million or $0.32 adjusted loss per share in first quarter of 2015.

The key energy company reported continued year-over-year growth in both its top and bottom lines primarily driven by a favorable impact of the company’s strategic renewable natural gas deliveries.

There’s significant year-over-year growing adoption of refuse trucks powered by natural gas and primarily driven by the expanding need for cleaner fuel vehicles to comply with the global environment regulations.

What next?

Clean Energy's superior capitalization management, diverse set of products, significant penetration in several transportation markets and environmental benefits linked to the cleaner fuel together has resulted in a notable expansion of recognized fleets increasingly fueling with natural gas and thus, benefiting the cleaner fuel generation company.

The accelerated adoption of natural gas as a transportation fuel worldwide is estimated to deliver significant top line growth for Clean Energy and thus, allowing it to share a major part of its earnings with the key stakeholders in the form of dividends and strategic share repurchases.

There seem to be abundant sources of natural gas across the US including several strategic shallow, mid-depth and deepest fuel shale plays located all through the country which are believed to act as an unending supply of natural gas for the company, benefiting the key stakeholders over the longer term.

There’s notably expanding demand for natural gas across the globe with several gallons of the clean fuel used every year by the market including 1.5 billion gallons used by transit buses, 2 billion gallons consumed by airport vehicles, 2 billion gallons again used by refuse trucks and finally, over 25 billion gallons being consumed by the heavy duty trucks.

The plentiful sources of natural gas across the country are projected to comfortably satisfy the ever-expanding demand for clean fuel for transportation purposes and therefore, continue to benefit the cleaner fuel production and distribution company.

Clean Energy has a strong global network of natural gas fueling stations spread across both private and public locations throughout the US and providing a range of diversified services including, CNG, LNG and RNG fueling services, providing advanced compressors and equipment, superior station technology and construction services, renewable fuels, engineering and construction, grants and financing, facilities modification and round the clock support and services.
Further, Clean Energy has over 980 robust fleet of customers, more than 44,000 NGVs fueled daily, and over 570 natural gas fueling stations.

Clean Energy is believed to be a major player and provider in the global natural gas fuel market, successfully serving fleet customers at 39 key airports, natural gas driven transit buses reaching 25% of total buses running, more than 55% of fresh refuse trucks operate on the clean fuel, rail industry leveraging LNG driven locomotives, robust virtual CNG delivery to key institutional and industrial energy users and the heavy-duty truck market starting to transition to natural gas with nearly 6% of heavy-duty truck market equaling the complete refuse market.

The extremely well-diversified sources of natural gas all through the US are projected to deliver sustainable long-term company growth, given the expanding fleet of vehicles running on the cleaner fuel.


Overall, the investors are advised to “Sell” any equity held in Clean Energy Fuels Corp. considering the weaker global commodity demand and pricing environment coupled with the expanding fuel exploration costs are eating into the margins of the company. Moreover, CLNE has a debt-burdened balance sheet with notable total debt of $524.49 million against a weaker total cash position of $162.93 million only, restricting the company to continue with its daily operations profitably. The profit margin of -25.43% signifies no profit but loss. Also, the PEG ratio of -0.31 seems disappointing and illustrates no growth but decline as against the robust industry’s growth average of 3.04.
Published on May 23, 2016
By Subhen Mittra

Copyrighted 2016. Content published with author's permission.

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