Fuel Systems Solutions, Inc. (FSYS)

[Democritus_of_Abdera]

Re: FSYS as good current investment...

Kingsplay, to answer your question regarding if FSYS is a good investment at this time... there are several good investment opportunities out there, and I hesitate to say that FSYS is the best of the lot.

As a company, FSYS has a diverse and well developed industrial and transportation customer base. It’s finances are solid (no substantial debt). And its leadership is conservative, not likely to overextend the business (at least that is my view).

As a stock, FSYS’ growth rate is modest and it is not attracting investors focused upon growth. FSYS does not have a dividend to attract value investors. Investors looking to the possibility that North America will embrace natural gas as a transportation fuel are focusing more on stocks such as WPRT that serve the commercial truck fleet (i.e. see your #msg-75926898) than the automobile fleet (where FSYS has an advantage). All-in-all, It appears that most of the FSYS stock activity can be attributed to traders that are taking advantage of FSYS’ volatility (i.e. FSYS has a Beta of approx 2.3)

In summary, I like the company, I’m ambivalent about the stock.

As to the unexpected, I’m keeping an eye out regarding the following:

1) A possible dramatic increase in after-market conversions of automobiles to CNG/LPG should individuals in economically stressed economies go into a defensive mode. This would benefit FSYS’ top line (albeit with some margin erosion). Support for this contention was recently provided on the Yahoo msg board by bobdeschamps on May 18, 2012; i.e. cng/lp conversions increased dramatically in April 2012 despite an overall decrease in total auto sales; see: http://www.allaguida.it/articolo/auto-a-metano-e-gpl-aumentano-le-vendite-per-il-caro-benzina/60365/ & http://www.infomotori.com/infoflash/2012/05/15/auto-metano-boom-immatricolazioni-517/

2) The CEO’s current contract expires at the end of this year. This anniversary date provides an opportunity for a dramatic change in company structure ... i.e division into two companies, or new leadership... This was an issue that I raised in #msg-72508275.

3) A possible breakthrough in direct injection technology that might give FSYS a technological advantage... This issue was raised in the Nov 9, 2011 FSYS Q3 question and answer session; i.e.

Dilip Warrier – Stifel, Nicolaus & Co. :
Okay. And then just one bigger-picture question. Fully understanding the aftermarket is a huge opportunity on the transportation/automotive side. On the OEM side, as they pursue strategies to downsize engines and do more direct-injection turbo-charging. Can you talk about how your product portfolio addresses that transition over the next several years?
Mariano Costamagna – FSYS CEO:
Okay, Roberto. Would you please reply to that?
Roberto Olivo – FSYS President BRC Operations:
Yes. I’m very pleased to answer. Obviously, we are developing our new generation of products in close contact with most of the OEMs. The downsizing and the application and the utilization of direct injection is going to be, let’s say, one of the leading phenomenon, let’s say, that is going to influence the automotive industry. And being based in Europe, we know that, obviously, Europe is going to take a leading position in this respect. America, which is normally using much bigger displacement engines and so on, will follow. We are working on direct injection. We are developing our system. We have different, let’s say, solution. And, obviously, it’s going to be one of the key for the success for the coming years.