Fuel Tech (FTEK) provides technologies to reduce pollution, particularly nitrogen oxide emissions generated by coal power plants. Fuel Tech also markets fuel treatment chemicals and technology that improve boiler efficiency and cut some sulfur and carbon dioxide emissions. Coal accounts for 50% of power generated in the US, 70% of India’s and 80% of China’s power generation. It is the cheapest way of generating power and gaining in popularity in China. In fact, an everage of 2 coal-fired power plants are starting every week in China.

Fuel Tech has recently announced expansion into China. Analysts expect its earnings to rise to 42 cents a share in 2007, from an estimated 27 cents in 2006, thanks to more contracts with utilities in Europe and the US. The company has no debt and it is cash flow positive. 20% of the total float of FTEK shares is currently being shorted and the stock has pulled back sharply in the last few days, currently sitting just above its 200-day moving average. Back in December, I posted a bullish piece on Fuel Tech. With earnings out this morning, I recommend watching the price action and buying around the $26 level.

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