NEW YORK (TheStreet) -- Shares ofaCDTia soared 72.02% to $2.89 in morning trading Thursday after the emission control technology company announced it had received two patents from the U.S. Patent and Trademark Office. The USPTO awarded the two patents foraCDTi's new technology that replaces expensiveaplatinum group and rare earth metals in catalytic converters. These patents represent the first of a family of patents for the company's Spinel technology, a proprietary clean emissions exhaust technology that CDTi claims will "dramatically reduce the cost of attaining more stringent clean air standards." The Spinelatechnology, which CDTi had kept confidential until its announcement Thrusday, will power multiple catalytic product lines that CDTi thinks could disturbathe standard platinum-based and rare earth-based device industry. Must Read: Warren Buffett's 25 Favorite Stocks STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. "Currently global OEMs spend billions of dollars annually on platinum group metals mined in South Africa and Russia, and hundreds of millions of dollars on Chinese-sourced rare earth metals," said CDTi CEO Chris Harris. "These costs are expected to dramatically increase with conventional technology as new regulations like U.S. EPA Tier 3 kick in. Spinel technology solves a major industry supply and cost problem and marks a major breakthrough both for us and for all OEMs around the world manufacturing fossil fuel-powered engines." Separately, TheStreet Ratings team rates CLEAN DIESEL TECHNOLOGIES as a "sell" with a ratings score of E+. TheStreet Ratings Team has this to say about their recommendation: "We rate CLEAN DIESEL TECHNOLOGIES (CDTI) a SELL. This is based on some significant below-par investment measures, which should drive this stock to significantly underperform the majority of stocks that we rate. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, weak operating cash flow and poor profit margins." Highlights from the analysis by TheStreet Ratings Team goes as follows: The debt-to-equity ratio of 1.15 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, CDTI maintains a poor quick ratio of 0.81, which illustrates the inability to avoid short-term cash problems. Net operating cash flow has significantly decreased to -$2.51 million or 328.37% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower. The gross profit margin for CLEAN DIESEL TECHNOLOGIES is currently lower than what is desirable, coming in at 33.59%. Regardless of CDTI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, CDTI's net profit margin of -9.44% significantly underperformed when compared to the industry average. The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Auto Components industry and the overall market, CLEAN DIESEL TECHNOLOGIES's return on equity significantly trails that of both the industry average and the S&P 500. In its most recent trading session, CDTI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year. You can view the full analysis from the report here: CDTI Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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