New Flyer Industries: Flying high

New Flyer Industries Inc. (TSE:NFI.UN)
Winnipeg, Canada
http://www.newflyer.com/

52-week low / high: $9.02/ $13.12
Shares Outstanding: 23.12 million
Market Capitalization: $435.25 million
 
Other than going long on oil and buying gas company shares, there are other ways to profit off surging fuel prices: public transportation. With the price of gas sending jaws to the ground and lightening the load on American wallets, many consumers are scouring for ways to stem the financial bleeding. In 2006, Americans took the most mass transit trips in 50 years and industry analysts say a continued increase is likely. Canada-based New Flyer Industries Inc. (TSE:NFI.UN), a maker of heavy-duty transit buses, stands to benefit.

The company controls a commanding 42% of North American bus manufacturing. Its closest competitor, Hayward, Calif.-based Gillig Corporation, only has a 26% market share and manufactures mainly diesel-powered buses. Unlike some buses that guzzle gas and pump carbons into the atmosphere, New Flyer won’t have to worry about boycotts from “green” customers. On April 24, New Flyer was named the as one of Canada's most earth-friendly employers for 2008 by the editors of Canada's Top 100 Employers. Companies were evaluated based on environmental initiatives involving employee participation and the degree to which environmental values have been integrated into the corporate culture.

“This validates the substantial effort we have put forth in ensuring our pollution prevention and waste reduction activities are successful and embraced by our employees,” New Flyer CEO John Marinucci said in a statement. “Not only do we offer the broadest range of environmentally-friendly vehicles of any heavy-duty transit bus manufacturer in Canada and the U.S., we are committed to building these vehicles in a sustainable manner.”

New Flyer has a broad array of products, with bus models running on a variety of fuels. The company makes electric hybrid buses, as well as models that run on fuel cells, diesel, and compressed and liquid natural gases. New Flyer has pumped in about $7 million into research and development over the past two fiscal years.

Much to the relief of potential investors, the environmentally-friendly efforts are not damaging profits. New Flyer finished 2007 with a backlog of $2.8 billion worth of orders, up 54.5% from $1.8 billion a year earlier. The firm said it expects continued strong order volume in the United States and Canada for the foreseeable future.

Note: New Flyer Industries Inc. (TSE:NFI.UN) is on the “Watch List” of Rising Star Stocks, a subscription investment newsletter from Business Financial Publishing, which also publishes SmallCapInvestor.com. As a Watch List company, New Flyer displays many characteristics found in successful stock winners, and is being closely monitored for possible inclusion in the Rising Star Stocks portfolio at a later date.

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