A Big Upgrade for Clean Energy Fuels

Since the beginning of this year, Clean Energy Fuels (Nasdaq: CLNE  ) hasn't been able to break above a mediocre three-star rank in CAPS -- until now. The natural gas provider has impressed enough top-performing members of our 160,000-strong Motley Fool CAPS community to once again touch the four-star level. And with 965 members giving their opinion on the alternative fuel provider, there's plenty of analysis and commentary explaining the recent optimism.

Investors have seen some positive developments recently that many believe will benefit Clean Energy Fuels either directly or indirectly. The company itself has seen strong volume growth in the first quarter, with delivered gasoline gallon equivalents up 56%, and it has also been expanding its fueling station network. Natural gas technology firm Westport Innovations (Nasdaq: WPRT  ) has also seen an uptick in its natural-gas engine shipments in its fiscal third quarter, pointing to a general trend toward the alternative fuel.

A proposal in Congress for increased tax incentives for natural-gas fleet vehicles also has more investors bullish. While the proposal would be a boost for the whole industry, alternative fuel component maker Fuel Systems Solutions (Nasdaq: FSYS  ) expects further adoption of natural gas in the U.S. regardless of the proposal's outcome. And many investors find it hard to argue against a "heads we win, tails we win" scenario. 

Domestic natural gas discoveries in recent years like Chesapeake Energy's (NYSE: CHK  ) Haynesville Shale find also have more investors singing Clean Energy's song. Clean Energy has historically bought much of its liquid natural gas from ExxonMobil (NYSE: XOM  ) , which itself is making a big move into gas with its purchase of XTO Energy. And the high spread between oil and gas prices, which has prompted companies like Chesapeake and Devon Energy (NYSE: DVN  ) to aim for more oil exposure, is expected to remain for several years. So the relatively low cost of natural gas should benefit Clean Energy Fuels, according to management.

While Clean Energy's subsidiary BAF already converts a number of GM and Ford (NYSE: F  ) vehicles for customers, recent moves by GM to offer natural-gas-powered fleet vans and by Ford to offer an engine package that's more fit for a natural-gas conversion for its Transit Connect Taxi are also seen as positives for the industry.

Do you think Clean Energy Fuels deserves its raised status? Add your thoughts in the comments box below on this page, or head over to CAPS to rate the company.