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Fuel Systems Solutions, Inc. Message Board

  • bluebloodedtrader bluebloodedtrader Jan 27, 2013 8:32 AM Flag

    Why have shareholder's suffered despite a doubling in the nasdaq?

    CRAZY as it seems.....FSYS is the same price today as it was on March of 2009..... Since then, the nasdaq has more than doubled. FSYS's book value ( shareholder's equity) has increased from $10 to $16, while its net cash postion more than tripled from $20 million to $66 million ( thanks in part to the help of a 2 million share offering sold at $30 per share) How can anybody explain the disconnect between the share price and the apparent improvement in the company's fundamentals?

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    • Their biggest market, though changing, is Europe. Revenue peaked in 2009 for their BRC product segment that supplies parts and services to convert gasoline engines to nat gas or propane. This was and still is their largest division. BRC Revs have been declining steadily in Europe (though partially offset by growth in Latin America and Asia) as the Italian gov subsidies were reduced starting in 2010 and further exacerbated by the European crisis and Euro crash by close to 20% against the USD.

      Their BRC division should turn the corner in 2013 with Europe recovering, the Euro bouncing back (already has come back like 7% from lows last year), and with Asia and Latin America continuing to drive growth.

      Also,their Impco division that makes nat gas engines for trucks to fork lifts and street sweepers, should have another record high revenue year, especially with the GM contract. If they could win one or more major auto maker contracts, that would be a nice catalyst.

      Can't say FSYS stock has bottomed as short sellers are betting big on the failure of FSYS, but I am almost certain revenue has turned the corner and we should see at the very least, 10% revenue growth in 2013. Markets are at all time highs, meaning valuation multiples on stocks are expanding, but FSYS is seeing their multiples continue to contract as their stock declines. The combination of a turnaround growing business and contracted valuation multiples compared to the broader market make FSYS' stock risk reward ratio look very compelling. Not to mention they are in a very hot growth natural gas industry.

      Sentiment: Strong Buy

5.40+0.17(+3.25%)Jun 1 4:00 PMEDT