Clean Energy sinks after Piper Jaffray labels it a top sell

Clean Energy Fuels (CLNE -8.5%) is added to Piper Jaffray's Top Picks List as a Sell with a new $4.50 price target, cut from $9.50, saying trucking companies overwhelmingly prefer a type of natural gas CLNE doesn't sell.

The firm's channel checks indicate that more than 90% of engines emerging from the Cummins-Westport (CMI; WPRT) joint venture are opting for compressed natural gas, which fleets can obtain for $1.50/gallon, instead of liquefied natural gas, which CLNE sells for at least $2.75/gallon.

Also, the firm estimates CLNE will sell only 15M gallons of its Redeem fuel made from landfill gas next year; since CLNE will sell ~299M gallons of fuel in 2014, Redeem will not have a major impact on overall profit margins.

Comments (19)
  • D Cohen
    , contributor
    Comments (5) | Send Message
    This would be a reason to sell if it weren't for the fact that CLNE not only sells CNG, but sells mostly CNG (see, for example, the company's June 14 presentation and its 2013 2Q 10-Q which shows roughly 70% of sales are CNG).
    8 Oct 2013, 02:16 PM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (9912) | Send Message
    No doubt an incredible fraud of a report. Not sure I've ever seen an analyst so blatantly make up 'facts'. Naturally CWI is selling mostly CNG engines since the new version is suppose to be at full production until year-end.


    This report sounds like an attempt to get shorts it turn fast...
    8 Oct 2013, 03:22 PM Reply Like
  • LeahyInvestor
    , contributor
    Comments (163) | Send Message
    I can't believe they clearly don't understand basics of CNG and LNG. LNG denser = cost more but requires less space, which is ideal for SEMIs and not taxis that use CNG.
    8 Oct 2013, 06:11 PM Reply Like
  • busterbrown
    , contributor
    Comments (202) | Send Message
    On top of that the ceo just spent a million bucks of his own money to buy shares at market price saying the future has never looked so good right now. I seriously doubt he would be purchasing shares if the Piper Jaffray report were correct. I hope to see some sort of press release tomorrow morning from CLNE.
    8 Oct 2013, 11:16 PM Reply Like
  • pig1mouse
    , contributor
    Comments (7) | Send Message
    if you chose to invest in this space, you should have checked the % of short-sellers in it. They are now having their day in the sun. Fundamentals(and now technicals) aside, this could be a great buy opp. here, if you can time the short-side buy-in. Good luck. Brokers love to invest in this name, since its a great story. Always with OPM(Other Peoples Money).
    8 Oct 2013, 02:27 PM Reply Like
    , contributor
    Comments (23) | Send Message
    Thank you! I did not know that Clean Energy does not sell Compressed Natural Gas. I will get out.
    Thanks again!!!!!
    8 Oct 2013, 02:52 PM Reply Like
  • LeahyInvestor
    , contributor
    Comments (163) | Send Message
    They do both CNG and LNG, check the reports
    8 Oct 2013, 05:52 PM Reply Like
  • ultimatespinach
    , contributor
    Comments (3) | Send Message
    This is just baffling to me. Don't we already know this? Aren't the vast majority of NG-enabled engines going to fleets -- garbage haulers, UPS trucks, taxis, etc. -- that use CNG? Isn't CLNE building and/or operating many of these fleet CNG stations?


    Don't we already know that LNG-enabled engines for long-haul trucking will be a small minority of NG-enabled engines but will consume a disproportionate percentage of NG because of the vastly higher number of miles they will cover?


    Wouldn't a reputable firm like Piper Jaffrey be well aware of all this?


    This looks like a complete misunderstanding by Piper Jaffrey of what Clean Energy does. I find it hard to believe they could be this out of it.


    What am I missing?
    8 Oct 2013, 03:23 PM Reply Like
  • ex GM emp
    , contributor
    Comments (116) | Send Message
    You are missing the fact that some PJ employees may be short CLNE. Analysts are in business for one thing, to manipulate stock prices.
    13 Oct 2013, 07:46 PM Reply Like
  • User 13478712
    , contributor
    Comment (1) | Send Message
    What type of natural gas do these companies prefer? It was expected at first that most of the new 12-liter engines would be used for regional transportation, making CNG a logical choice. However, if you look at the growth opportunities for the heavy duty truckers, LNG is fuel that will be used. What about the companies core operations in the refuse, airport, and transit markets? Guys trying to drop the price so he can buy it. Nobody expected Redeem to move the needle.
    8 Oct 2013, 03:24 PM Reply Like
  • Trojanworley
    , contributor
    Comments (4) | Send Message
    Fortunately for me my office window faces a CLNE station in Pasadena, I can see a slice of the story unfold every day. Throughout of the day, the station is packed with taxis, garbage trucks, Cable TV vans, police cars, various heavy duty trucks, CNG cars, school buses, municipal buses, other fleet customers, etc. Lets not forget all the projects CLNE has with other municipal and private fleets around the country. I'm a buyer on the dip.
    8 Oct 2013, 03:46 PM Reply Like
  • LeahyInvestor
    , contributor
    Comments (163) | Send Message
    Piper Jaffrey seems to be the worse researcher, or just wanted a quick rise on shorting. I think this will result in law suits. They streach the truth and so forth. They sell most CNG, LNG is denser which means it contains more energy designed for big machines like SEMIs that would require huge CNG tanks. LNG costs more because it contains more energy for more thirsty machines. That's why small cars, taxis tend to be more CNG. $CLNE has more CNG stations, and trying to add more LNG.
    8 Oct 2013, 05:56 PM Reply Like
  • LeahyInvestor
    , contributor
    Comments (163) | Send Message


    Check out for yourself.
    8 Oct 2013, 05:57 PM Reply Like
  • LeahyInvestor
    , contributor
    Comments (163) | Send Message
    $GE has a small stake in $CLNE and made financing available for the company.
    8 Oct 2013, 06:09 PM Reply Like
  • LeahyInvestor
    , contributor
    Comments (163) | Send Message


    Clean Energy Fuels (Nasdaq: CLNE) stock declined on Tuesday after the company was criticized by analysts at Piper.


    In response, the company's Director of Investor Relations, Tony Kritzer, made the following statement to StreetInsider.


    "The piper analyst was completely incorrect and incredibly irresponsible in putting out that note.


    We think the future will be a combination of CNG and LNG (lots of reasons for LNG including range, weight, and station costs).


    BUT, for the sake of argument, let's say it goes 100% CNG
    1. GREAT!
    2. 70% of our business is CNG
    3. We've build more CNG stations than the rest of the industry combined
    4. We spent $140mm on a world-class compressor company in anticipation of a huge surge in CNG infrastructure build out
    5. CNG pipelines only run in urban areas. The only way to get CNG fuel to rural and highway truck stops is through L/CNG. All of our LNG stations are designed to have this capability."
    8 Oct 2013, 06:20 PM Reply Like
  • Thinkerbus
    , contributor
    Comments (57) | Send Message
    Immediately after reading the Piper article and major downgrade, I sent them a note of disagreement with their article and copied it to CLNE. To me, Piper needs to conduct real research, retract the report and apologize to CLNE and its shareholders. The real prize (all along ) has been LNG which has a potential market to replace 25 billion gallons of diesel (that is about $100 Billion--BIG), which makes the CNG fueling market a mere thimble of a business. In either case, with only a few minutes left before the market closed for the day, I purchased quite a few more CLNE shares on the downward movement and think this will be one of my best investments in the long run. Where did P.J. get this analyst from anyway??? They should be ashamed!
    8 Oct 2013, 07:09 PM Reply Like
  • rcarterbrown
    , contributor
    Comments (13) | Send Message
    The analyst who wrote that should look for a new job because they clearly aren't capable of basic research. Although I guess I should be thanking them for clearing out the shorts and allowing me to buy more shares at a bargain price. It'll rebound in no time...
    9 Oct 2013, 04:06 AM Reply Like
  • Tondog
    , contributor
    Comments (155) | Send Message
    If you (you the investor) read the report the PJ analyst is merely stating that the margins are much lower on CNG than LNG. Being that anyone, with the right compressor, can make CNG he feels Clean is losing (if it ever had one) a competitive moat. IMHO I wouldn't waste your time, unless you're really hard up, on writing the SEC, IR @ Clean, PJ, etc. cause 98% of people don't care about your woe's and the other 2% are laughing about it :-)
    9 Oct 2013, 12:03 PM Reply Like
    , contributor
    Comments (8) | Send Message
    Clean's margins on CNG have been as high or higher than on LNG so that is not an issue or problem, if US goes mostly with CNG then Clean is still a big winner. Fact is that there will be a mix of the two fuels based on application, in a lot of situations LNG is only practical answer, but in most of the local fleets CNG will be cheaper and fit the fleets needs just fine.


    Value expectations based on your "competitive mote" mention should be cast aside as this is an open and competitive market and no player will have dominant pricing power as the industry scales up. That said CLNE clearly benefits the most by far with additional demand for either CNG or LNG as they have the most outlets for both fuels developed and open and have a big lead over any others entering now. The vertical integration on major CNG components also benefits CLNE strongly as even as others build stations many will buy their compressors from Clean.
    11 Oct 2013, 12:28 PM Reply Like
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