“$32 Fuel Conversion Stock to $64 by July 7″ Navellier

I won’t be able to give this one the full Gumshoe treatment today, but it seems to me that every adult American received Louis Navellier’s latest advertising email over the last day or two … so I thought you’d like to know the company he’s teasing.

The ad is for a company that works to expand Compressed Natural Gas (CNG) usage in the transportation sector, as a cleaner replacement fuel. Well, to be clear, the ad is for Navellier’s Quantum Growth newsletter, but the stock he’s teasing is related to CNG.

And he promises that the stock will double in the next two weeks, or your money back.

“All thanks to this company’s breakthrough fuel injection systems that convert $4-a-gallon gas guzzlers into 63-cent-a-gallon clean air machines.

“Buy this one stock today and I guarantee you’ll thank me a thousand times on July 7th —or you won’t pay a dime.”

Now, I think I’ve made clear that I’ll make no such promises about a stock doubling. But I will tell you what this one is, for the low, low, price of nothin’.

If you want to know how Navellier’s last short-term prediction played out, you can read my writeup from a couple weeks back — that stock was going to double, too … hasn’t quite gotten there yet, but it actually did have a nice run last week. We’ll see how it does now if Navellier’s readers get shaken out by the passage of his June 20th deadline.

And as I noted in that writeup, Navellier loses nothing if his “guarantee” doesn’t play out — he, like most publishers, offers money-back guarantees during a trial period anyway, so this is just a fancier way of saying the same thing. And it certainly got the attention of a lot more people, if my mailbox is any indication. He’s putting his reputation on the line in a limited way, I suppose, but if any of these big publishers are worried about ruining their investing reputation due to aggressive email marketing, I’m afraid that ship sailed long ago.

So anyway, here’s how Navellier teases this one:

“There’s a fuel conversion revolution at hand, and there’s simply no stopping it.

“The biggest profit taker of all will be a little known fuel conversion company that converts American gas guzzlers into clean burning compressed natural gas (CNG) vehicles—in the time it takes to service your car.

“Please add it to your holdings today.

“Our research indicates that when the company’s 2ND quarter earnings are released, the company’s past 511% earnings growth will not only go supersonic but also make the company’s past 90-day 200% gains look like a drop in the bucket.”

So … I can’t go deep into this company’s books at the moment due to lack of time, but I didn’t want to delay in telling you that the name of this firm is …

Fuel Systems Solutions (FSYS)

This one is smaller than the average Navellier pick, so it may well get a boost from his recommendation if he keeps emailing everyone over and over about it — it’s about a $500 million company. They are involved in alternative fuel systems, primarily in natural gas, and they are profitable but expensively valued. Other than the fact that the shares have already tripled in the last couple months, I know precious little about them.

So … no great insight here, but at least you’ve got the name … go forth, researchify, and share with us what you think. I would not be surprised to see this one keep running with Navellier’s mighty promotional machine behind it, like GTE did for a little while, but I have no idea why the company’s stock has tripled — or whether that nice mountain on the stock chart might soon crumble, so be careful.

The author will always disclose any direct long or short equity, debt or option position in any stocks written about as of the day of publication, and will not trade in any stocks mentioned for three days (72 hours) after publication. Full disclaimer is at the bottom of the page.

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1. Whew — wild morning in this one, up 10%+ on more than 500X normal volume. You, too, can have massive returns if you’re able to email 400 quazillion potential investors at once!

   Or wait, maybe it’s the untold thousands of loyal Gumshoe readers?

   Who knows, maybe a few of you readers checked the site on Sunday evening when this first went up, and enjoyed a nice run from the $37 pre-market to the current $40. If so, I hope you figure out why Navellier loves it so … other than the fact that it’s going up (which is certainly enough for some folks).

   Interesting start to the week — enjoy, everyone, and keep your eyes peeled for the next bit of Gumshoe goodness!

   [Reply]

   Posted by StockGumshoe | June 23, 2008, 10:05 am

2. interesting solution wich is not new we have it in europe for over 40 year and it is working with nlg i had it in the seventies it is a non poluting system the only bad thing you have a big heavy tank containing liquid gas pressurised at 140kg/cm² .

   [Reply]

   Posted by j.mihailescu | June 23, 2008, 10:39 am

3. Hi Travis,

   Been reading your Gumshoe editorial for about a month now. Very enlightening.

   What would you consider to be the best top 5 news letters for someone who has retired and wanting to learn more and get some decent advice as to which stocks to invest in. Specifically, looking for good dividends, but in reliable companies. PF suscks as do other newsletters I’ve tried to date. I’m a novice and to date have lost about $100k on these so called experts. I do have some stocks I picked on my own through resources on TD Ameritrade and am doing very well, even in this market.

   Sincerely,

   Dennis

   [Reply]

   

   StockGumshoe Reply:
   June 23rd, 2008 at 12:08 pm

   Thanks Dennis – I can’t recommend newsletters personally, but I hope other readers will chime in with their ideas and recommendations (and I know many folks in the Forum talk about this from time to time). Hulbert is the best source if you want to know the actual risk-adjusted performance of newsletters over time, but unfortunately he is able to cover only a small portion of the universe (less than 200 newsletters, I think, out of probably thousands currently available).

   This is also a very personal decision, since everyone wants different things out of their newsletters (quick buy and sell trades, education, a good read, various holding periods, income, growth, etc.) — and hey, since you’ve done well with the ones you’ve picked on your own, maybe that’s your answer.

   Good luck to you, sorry I can’t make specific recommendations.

   [Reply]

   

   Dennis Reply:
   June 24th, 2008 at 10:07 am

   Thank you for taking the time to respond.

   Dennis

   [Reply]

   

   T Reply:
   June 23rd, 2008 at 5:51 pm

   Dennis,

   You may want to take a look at Outstanding Investments which comes from Agora. I have only been a subscriber a short time but their portfolio going back 5+ years is full of winners. And if I remember correctly, Hulbert ranked them as the number 1 letter for the past 5 yrs. Biggest downside is that Agora will constantly send you teasers for all their other publications.

   http://www.agorafinancialpublications.com/the%5Fpubs/ost/

   [Reply]

   

   Dennis Reply:
   June 24th, 2008 at 10:07 am

   Thank you

   [Reply]

   

   An Old Guy Reply:
   June 23rd, 2008 at 6:04 pm

   I personally cannot imagine loosing anything like $100K on investments over any time period (you must have more money in your retirement “kitty” than I have). The first thing is recognize that an expert is, “X”– an unknown quantity and “pert” — a leak under pressure. And that all of this “expert” advise does not substitute for your own informed judgment (Gumshoe makes this point repeatedly). Think that the sub text from ye ole gumshoe is that all of the news letters that supposedly to make you rich in one easy lesson (and one hard one — loosing money on their advise), are worth less than the paper are written on (probably zero as they are usually distributed vis e-mail). Personally my first rule — DO NOT trade; buy to hold, which admittedly is a little difficult currently. Secondly use the DRIP method of buying stock, which is directly from the company itself (the fees are usually very low). The selection is fairly limited S&P 500 or at least “big board” type stock. I use Quicken.com, to which access is included in Quicken for free(at least Deluxe) to get standardized information and opinion on a particular stock I am interested. Am occasional buyer of no load indexed mutual funds of various types Lastly read the Gumshoe just out of curiosity to see what kind of flakiness is out there, which he does a very good job of explaining.

   [Reply]

   

   Dennis Reply:
   June 24th, 2008 at 10:08 am

   Thank you. No, not rich, just gullable, I guess. Lessons learned. Glad I stumbled into Gumshoe.

   [Reply]

   

   Chris S Reply:
   June 24th, 2008 at 4:26 pm

   Hi Dennis,
   I’m a divy investor and have had success with Roger Conrad’s “Canadian Edge”. Also, check out Bullmarket.com – a online service for both the long and short term investor with a 97% success rate since ‘03. Good luck.

   [Reply]

   

   Chris S Reply:
   June 25th, 2008 at 12:55 pm

   Correction: that should be Bulltrade.com. Sorry!! I do subscribe to this service – “special alerts”.

   [Reply]

   Posted by Dennis | June 23, 2008, 11:47 am

4. Hi, I’m new to investing and I stumbled upon this site and I love it. It appears to be the only site with honest people. The script in some of those teasers is pathetic. Nice to see a free site with honest discussion to sift through the screwballs. Ty Travis.
   My question is: what actually makes the price of a stock go up or down? I thought that it was the value/revenue of the company but it looks like the the price can go up or down based on a newsletter push. Does this mean supply and demand affects the price too? Can somebody give me some insight on this or refer me to a website so I can read up on it? Ty.
   Maui Jim

   [Reply]

   

   StockGumshoe Reply:
   June 23rd, 2008 at 1:24 pm

   Sunspots, cosmic rays, and gravity. Or at least, that’s as good a guess as anything.

   In more seriousness, most people generally believe that a company’s income (earnings, or some variation thereof) determines the movement of the share price in the long run. In the shorter term, it can be anything — the chart patterns, news releases that cast the company in favorable light, recommendations in magazines or on CNBC, newsletter picks, or even plain old spam campaigns.

   The great virtue and the great failing of technical analysis is that it tries to predict stock movements based on indicators of supply and demand for the stock itself (that’s a simplification, but I’m a simple guy).

   On the other side, the great virtue and the great failing of fundamental analysis is that it tries to figure out the value of a company but pays little attention to the market for the stock (ie, whether other investors want to buy it or not today).

   There is no right or wrong answer, in my book, but the short answer is: Almost anything can move a stock, but generally stocks that go up over a long time period do have improving business fundamentals — characteristics like improving margins, or growing sales or earnings, or an overall business environment for that company that is moving from uncertain to consistently good.

   If you’re interested in basic overviews of how the stock market works, my current favorite such overview is a book: The Little Book that Beats the Market, by Joel Greenblatt (he also provides a database implementing the recommendations of that book at http://www.magicformulainvesting.com/). It’s a fun and short book, and any teenager will understand it. There are lots of other good ones, too, and most investing books will give you a much stronger overview than a 1,000 word web page essay.

   [Reply]

   

   Jim Reply:
   June 23rd, 2008 at 2:05 pm

   Thanks for the info. Looks like the world of investing is even more confusing than I thought! Maybe I should stick to betting on the golf course, lol. At least I have some control there.
   Wish me luck.

   [Reply]

   

   John Sloan Reply:
   June 23rd, 2008 at 3:51 pm

   HI Travis and all
   In my opinion a stock continues to go up in price as long as there are more people around who want to buy it (for what ever reason including simply that they think they can sell before others) While of course a stock starts down when there is no one left to buy it and the first holder decides to sell.
   best to all
   john

   [Reply]

   

   StockGumshoe Reply:
   June 23rd, 2008 at 4:04 pm

   Well that’s something no one can argue with — elegantly put.

   Posted by Jim | June 23, 2008, 1:09 pm

5. this one has some good technicals, keep an eye on it. /Doug.

   [Reply]

   Posted by Doug | June 23, 2008, 3:13 pm

6. I bought FSYS at 14.25 and rode it up to 27.50, I lost it due to a tight stop. I waited awhile and bought it last week again for $32.45 and sold my 250 shares for $36.10, when it started to turn south. The company blew away the numbers by about 500%. Now, thanks to the Gumshoe, I know why it gapped way up this morning. Good work, Travis!

   [Reply]

   Posted by JoeG. | June 23, 2008, 9:08 pm

7. sorry if my reply pops up twice – I think I messed up my first try somehow. This is for Jim’s question about what determines the movement of stock price – check out http://investophoria.blogspot.com, read through some of the posts if you have time.

   [Reply]

   Posted by JD | June 23, 2008, 10:35 pm

8. Good tease by Navellier to get the last few bucks out of this for his traders before they all dump in splendid style. JMHO but I think he is playing on the fact that the mighty Gummy and friends are easily working out the teasers and has set the bait first with GTE which they ran up very nicely and then with this one. We shall see how it pans out but I for one am not touching it after such a massive run up over the last few months. I am sure
   Navellier is aware of this site and just might be using it to his advantage. Take care and keep up the good work.

   Den

   [Reply]

   

   StockGumshoe Reply:
   June 24th, 2008 at 10:45 am

   I suppose you never know, but I’d be surprised. And of course, it’s not Navellier himself doing this marketing, it’s InvestorPlace Media, which publishes his newsletters along with those of Robert Hsu, Tobin Smith, Georges Yared, Jon Najarian, and many more. You could get a nice conspiracy theory going, I imagine, but I expect they email more people during lunch than I reach in a week.

   [Reply]

   Posted by Denby45 | June 24, 2008, 10:31 am

9. $28.33 today definitely a pump and dump. Don’t say you were not warned. Hope none of you risked the family silver.

   Den

   [Reply]

   Posted by Denby45 | July 6, 2008, 4:27 am

10. Bought FSYS in mid-June at $30 and sold half in mid/late August at $61. Just bought half back at $50. If only all my “finds” could be so sweet…

    [Reply]

    Posted by Otis | August 29, 2008, 9:53 pm

11. Well, here we go: FSYS finally made a big move upward! Admittedly, after an even bigger move downward first…

    [Reply]

    Posted by Blurpie | November 9, 2008, 3:54 pm