3 Natural Gas Davids Challenging the Transportation Goliath

Clean Energy Fuels continues to expand, as does competitor Trillium CNG, a subsidiary of utility Integrys Energy Group, with both announcing station openings this week. Despite a slow 4th quarter, Chart Industries is also expecting to participate in LNG station expansion in 2014.

Mar 9, 2014 at 2:06PM

When Clean Energy Fuels (NASDAQ:CLNE) CEO Andrew Littlefair bought $1.4 million worth of stock in his company on the open market in September, you can rest assured that he didn't anticipate the stock taking anything like the drubbing that it has over the past several months. Between 2 analyst downgrades, a series of short attacks via anonymous articles posted online, and general market concerns about the slow uptake of natural gas vehicles by the trucking segment, the stock fell as much as 34% before a recent rebound. 

Littlefair's response? Buy more shares; another $100,000 worth, roughly. Another Clean Energy insider, Director Stephen Scully, just picked up $45,000 in shares this week as well. Despite concerns that adoption isn't happening quickly, Integrys Energy Group (NYSE:TEG) subsidiary Trillium CNG is planning to open 100 public and private natural gas stations in 2014, and Chart Industries (NASDAQ:GTLS) reiterated that it has a contract to build 20 LNG stations for a major oil company this year. 

Between the three, more than 150 stations will be either built or opened this year. What should investors do?

Chart moving ahead in U.S., China
Chart's latest earnings report and conference call  was a solid reminder that a lot of progress has been made in natural gas refueling, and that a lot of momentum is building up for 2014l; especially the second half of the year. CEO Samuel Thomas, from the earnings call :

In the infrastructure area, 2013 included multiple awards for LNG fueling equipment in Asia, as well as the previously mentioned award from a major oil company for 20 LNG stations here in North America. In LNG end-user applications, we continue to see strong order and revenue growth, despite the recent market debate concerning LNG versus CNG for heavy-duty trucking. Our perspective is the 12 liter, 400 horsepower Cummins Westport engine will now give the industry a capable pilot fleet vehicle on a broader scale.


Chart is the primary LNG tank supplier to the truck market in the U.S. Source: Chart Industries

Thomas further reiterated that, as the primary supplier of LNG tanks to the North American truck market, 2014 would see continued adoption of LNG, and he was anticipating mid-teen to mid-20% growth in sales related to the U.S. truck market for Chart's LNG products. In addition to its deal with what could be Royal Dutch Shell and TravelAmerica to build 20 LNG stations in the U.S., Chart landed a $50 million deal with PetroChina in the third quarter, and also announced an $80 million expansion to its manufacturing capacity in the country that will double its manufacturing capacity in the region. 

Integrys' Trillium ramping up, but slowly

Trillium Orlando Opening

Tullium LNG's latest station just opened in Orlando, FL. Source: Trillium LNG

Much has been made of the "CNG versus LNG" debate around trucking, but what's been ignored is that both liquid and compressed natural gas demand for trucks is growing. Integrys Group's most recent corporate presentation shows the combined CapEx for Trillium will be $121 million over the next three years, as the company expands its base of both private and public CNG stations. Clean Energy Fuels will spend almost as much in 2014 alone, building out both LNG and CNG infrastructure. Even with Integrys Groups financial backing (Integrys will spend more than $3 billion in total CapEx in the same period) Trillium's expansion appears to be happening at a slower rate, though part of the spend could be the nature of the stations that are being built. The company says it will build 101 public access CNG stations that class 8 trucks can access by 2016. 

Lots happening at Clean Energy
The string of new station openings and supplier agreements make it easy to understand why insiders at Clean Energy are buying. The company opened two more LNG stations recently, one in Texas, and one in Georgia, in addition to at least four more contract awards to supply and service CNG fleets in California, Pennsylvania, and Nevada. Combined, these deals represent almost 6.5 million gallons of natural gas every year. 


Clean Energy's position as the largest CNG and LNG supplier could be a big advantage. Source: Clean Energy Fuels

Clean Energy's gallons-delivered has grown enormously over the past several years; climbing from 101 million in 2009, to 214 million in 2013. CNG remains the lion's share of fuel volume, at 144 million gallon equivalents in 2013. However, Chart Industries and Westport Innovations both reiterated on their earnings calls that sales of LNG tanks for heavy trucks would be strong in 2014, especially in the second half of the year. We know that Chart sold 1,500 of its tanks in 2013, and Westport had a single order of 900 tanks, in addition to likely a number of smaller orders. The point? Clean Energy Fuels is rather uniquely positioned as the only supplier which offers both LNG and CNG, which could be a strong competitive advantage for mixed fleets. 

2014 a turning point
Insiders buying shares on the open market is no guarantee of a winning investment. But combined in with the serious growth in refueling capacity to support the increasing adoption of natural gas trucks, there are a lot of things that point to 2014 being an excellent year for the industry. Is it time for you to buy? That's for you to decide. 

Looking for more ways to play the North American natural gas boom? Read this free report
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!

Jason Hall owns shares of Clean Energy Fuels. The Motley Fool recommends Chart Industries and Clean Energy Fuels. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

Something big just happened

I don't know about you, but I always pay attention when one of the best growth investors in the world gives me a stock tip. Motley Fool co-founder David Gardner (whose growth-stock newsletter was rated #1 in the world by The Wall Street Journal)* and his brother, Motley Fool CEO Tom Gardner, just revealed two brand new stock recommendations moments ago. Together, they've tripled the stock market's return over 12+ years. And while timing isn't everything, the history of Tom and David's stock picks shows that it pays to get in early on their ideas.

Click here to be among the first people to hear about David and Tom's newest stock recommendations.

*"Look Who's on Top Now" appeared in The Wall Street Journal which references Hulbert's rankings of the best performing stock picking newsletters over a 5-year period from 2008-2013.

Compare Brokers