In its reverse merger with a California company, Clean Diesel Technologies Inc. might have laid claim to the best stock performance of 2010 of any local company ”“ except that it is no longer locally based.
In merging with Catalytic Solutions Inc., Clean Diesel Technologies kept its name but shifted its headquarters operations from Bridgeport to Ventura, Calif., where Catalytic Solutions has its base.
Both companies sell systems that reduce harmful emissions produced by diesel fuel exhaust, with a wide range of applications in the vehicular, construction, mining and marine industries. In the first three quarters, Clean Diesel Technologies lost $3.8 million on sales of just $1.4 million, closing the quarter with assets valued at just under $5 million; Catalytic Solutions revenue totaled $36.3 million, and the company lost $2.7 million during the period giving it total assets of $25 million.
In May, Clean Diesel Technologies announced plans to execute a reverse merger with Catalytic Solutions Inc., in a deal to keep its corporate name and Nasdaq listing while ceding control to its larger acquisition target.
When the deal closed Oct. 15, Clean Diesel Technologies simultaneously executed a reverse stock split. Over the next 10 days, Clean Diesel Technologies Inc. stock roared upward 45-fold before subsiding by December to a mere year-over-year gain of about 650 percent, quite enough to leave all other local issues of note in its wake. It was also enough to trigger an inquiry from Nasdaq officials on the recent trading activity in its shares ”“ Clean Diesel informed the exchange it was unaware of any material corporate developments not already disclosed to investors which would account for the spike in its stock price and trading activity.
With Clean Diesel no longer locally based, United Rentals Inc. can claim title to the top stock performance of 2010, with the Greenwich-based company”™s shares gaining more than 120 percent as it continued to overhaul its network of construction and landscaping equipment rental stores with an eye on pruning those that are least profitable.
“The industry overall is healing,” CEO Michael Kneeland told investment analysts in October. “This is a dedicated team that”™s focused on cost reductions. We”™re not going to let off just because we”™ve got (some) good quarters behind us.
“Our industry is still immature and it”™s still very fragmented, so it wouldn”™t surprise me to see a continuation of consolidation,” Kneeland added. “We”™re always scouring to see what opportunities exist out there. We”™re not going to be sitting idle.”
Gartner Inc. was the only other company to see its shares approach doubling, gaining 90 percent on the year. Rounding out the top five stocks were L-1 Identity Solutions Inc., after France-based Safran announced plans to acquire the Stamford-based company at a hefty premium; and Priceline.com Inc., which has been a star stock both in the depths of the recession and through the economic recovery ”“ perhaps encouraging its fellow Norwalk-based travel search engine Kayak Software Corp. to file recently for an initial public offering of stock.
The only local company to have outperformed Priceline over a two-year period is XL Capital Ltd., a Bermuda-based reinsurance carrier with its main U.S. operations in Stamford. XL Capital led all local companies in stock performance for 2009, and its shares remain up 500 percent from the end of 2008. Stamford-based Odyssey Re Holdings was the top performer the previous year; its shares are no longer listed on the New York Stock Exchange after parent company Fairfax Financial Holdings acquired its outstanding shares that were publicly traded.
Biodel Inc., meanwhile, suffered the worst performance, with its shares off by more than half after a Food and Drug Administration setback for a diabetes treatment the Danbury-based company is developing.
