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The stock was stuck for months at a four-star rank in CAPS, but enough top-performing members have recently turned bullish on Fuel Tech (Nasdaq: FTEK ) to have it once again touching the five-star level. A total of 1,027 members have given their opinion on Fuel Tech, with many of them offering analysis and commentary explaining the recent optimism.
Despite a slowdown in U.S. power generation, Fuel Tech's FUEL CHEM segment pulled in its strongest-ever second quarter in terms of revenue, and management expects the momentum to continue.
Notwithstanding the near-term sluggishness of the economy, CAPS members see healthy long-term demand for the company's air pollution control segment. It’s still feeling the effects of deferred capital spending, reduced electricity demand, and legislative uncertainty, but the company believes that some potential domestic customers will have to satisfy pollution standards and can't put off such improvements indefinitely. It recently announced $2.9 million in new contracts, and it could get a boost from potential new legislation aimed at emissions requirements.
In 2007, the company formed Beijing Fuel Tech Environmental Technologies in China, and investors are encouraged by the demand that the country’s growing number of coal-fired power plants provide. Miners such as Peabody Energy (NYSE: BTU ) , Rio Tinto (NYSE: RTP ) , and Yanzhou Coal Mining (NYSE: YZC ) are already feeding China’s coal appetite.
In addition, the country’s sovereign wealth fund has taken stakes in Teck Resources (NYSE: TCK ) and other companies to secure commodities to fuel its growth. Mining equipment manufacturers such as Joy Global (Nasdaq: JOYG ) and Bucyrus International (Nasdaq: BUCY ) have also grown their presence in the midst of increasing industrial demand, and investors see it all as beneficial for Fuel Tech.
Do you think Fuel Tech deserves five-star status? Add your thoughts in the comments box below, or head over to CAPS to rate it yourself. While you're at it, see what the very best CAPS analysts are saying now about the company.
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