Shares of natural-gas-for-transportation supplier Clean Energy Fuels Corp. (NASDAQ:CLNE) are up 10.2% at 2:47 p.m. EDT on August 9. Today's surge follows a bad day on August 8, when shares finished down 11% following the release of the company's second-quarter financial results after market close.
Today's big jump is interesting, considering that there really isn't any corresponding news that could be the catalyst. The company didn't make any announcement, there are no published Wall Street analyst upgrades of the stock, and there aren't any of the other usual suspects, such as rising oil prices.
If there's a "best guess" reason why shares are moving up today, it's that some investors are seeing the positives that really outweighed any negatives from the company's second-quarter earnings report. Clean Energy ended the quarter with more cash than debt, more improvement in lowered expenses, improved gross margins, and a clear path toward growth, with multiple catalysts set to drive adoption of natural gas in the heavy-trucking industry.
When energy giant Total (NYSE:TOT) took a 25% stake in Clean Energy earlier this year, there was a lot of excitement that sent the shares up more than double at one point on expectations it would drive a lot of growth. While I think it will do exactly that, the transportation sector doesn't turn on a dime. And over the past couple of months, that's a big reason why Clean Energy's stock price has fallen, and likely why we saw the big sell-off yesterday as investors who expected immediate growth -- an unrealistic expectation in this industry -- moved on.
The irony is, at least based on today's big jump, that plenty of investors see a buying opportunity. The company is set to generate positive cash flows in 2018, has the capacity to cover all of its debt obligations and still retain $40 million in cash, and has a strong partner in Total, which has already committed $100 million to accelerate sales of natural gas heavy trucks.
As CEO Andrew Littlefair said on the earnings call, the company is "back on the offensive" after spending several years fixing its balance sheet and operating structure. That's no promise that growth will accelerate in the next quarter or the one to follow, but Littlefair's comments make it clear that the company is no longer just trying to survive.