Shares of Fuel Systems Solutions Inc. (FSYS) rose sharply Friday after the maker of alternative fuel systems for automobiles reported second-quarter profit and revenue above Wall Street expectations. It also raised its full-year outlook.
FSYS is in a great position to take advantage of the current oil and fuel market conditions. The new energy/fuel policies in Congress all seem to be targeted towards alternative fuels, and the general public has grown more interested in alternative fuel methods and research.
Analysts expect FSYS to have 25% growth for the next five years. Additionally, as seen in the chart below, analysts are feeling more bullish about the company and made two upgrades to a “Buy” and one upgrade to a “Strong Buy”.
Looking at FSYS’s weekly chart gives us some insight to what is currently happening with the stock. One important factor to notice is the increase in volume since the upward breakout of the stock. This is probably a sign of institutional buying. It likely means that financial institutions and mutual funds are buying FSYS. And you definitely want to be where the big institutions with the big money are putting their money. Thus it is clear that the money managers are expecting positive results from FSYS.
I believe that because of the higher oil prices and the fear of it getting even higher, more money in going to be invested in companies such as FSYS. Therefore, its business is likely to continue growing at its current rate and creating support for the stock.
Overall, FSYS is a good long term investment in the current oil and fuel market conditions and is likely to do well for the rest of 2006. Keep an eye on the level of institutional buying happening and ride the wave up.
{ 0 comments… add one now }