Fuel Systems Solutions, Inc. (FSYS)

[MWM]

Takeout Target?

Here is an article form last year discussing the notion...

Fuel Systems Solutions (FSYS): The alternative fuel supplier has caught a flurry of good news lately that has rejuvenated its stock price: (1) natural gas prices continue to plummet, creating a bigger spread between the cost of gasoline/diesel and compressed natural gas, providing a significant incentive to convert to the cheaper alternative (2) the company received an order from AT&T to convert 600 Ford trucks to natural gas operation. (3) President Obama's climate plan was favorable to natural gas, and CNG is a cleaner burning fuel, which the green community will certainly embrace (4) further consolidation occurring in the sector, as Westport Innovations (WPRT) just acquired CLNE's gas vehicle division in a $25 million stock swap.

FSYS is susceptible to a takeover. Its CEO, Mario Costamagna, could be ready to cash in and monetize his holdings, especially considering he is already in his mid sixties. Costamagna is FSYS's largest single shareholder with a 16.6% stake. Its second largest holder is Kevin Douglas, with a 13.3% interest. Douglas is a also a major shareholder in Westport Innovations, another alternative fuel supplier.

FSYS is cash rich (it has $80 million on its books, including $12 million of German bonds), and is without debt. It is selling close to book value and is expected to earn $5 million on sales of $410 million in 2013. There are clues that a buyout could be in the works, as it recently cancelled its investment presentation at this year's Canaccord Genuity Growth Conference, and refuses to buy back its own shares.

Conclusion: The fact that both these companies offer unattractive earnings multiples, and their turnaround stories are painstakingly slow to progress, supports the case for a buyout scenario. Shareholders are frustrated and impatient, and could be open for some immediate gratification. When you realize that the majority owners in both these companies are well into retirement age, it is apparent that a sense of urgency dominates this line of thinking.

http://seekingalpha.com/article/1529822-two-stocks-with-takeover-written-all-over-them