"As the price of energy soars, I am convinced wealthy countries will turn to the one remaining fossil fuel that is still in abundance: coal," notes growth stock expert Jim Powell.

The editor of Global Changes & Opportunities Report, "Given the high price of oil, the coal-to-liquid fuel industry is starting to take off. One company that should profit handsomely is Headwaters (NYSE: HW)." Here is his review.

"To make coal available for most applications, it must be converted to gasoline and diesel fuel. Fortunately, that process is cost effective when oil costs over $40 a barrel. Since oil is now over twice that price, the coal-to-liquid fuel industry is starting to take off.

"Coal isn't without its critics. When burned, it gives off greenhouse gasses and other pollutants. However, technologies exist that solve those problems. With oil at current levels, it pays to implement the cleanup
processes and put coal to work.

"Headwaters should profit handsomely from the growing demand for coal. The company developed technology that changes the chemical composition of coal into high value products, including petrochemicals that are usually made from oil.

"The process also produces diesel fuel and gasoline. At the same time, pollutants such as sulfur and heavy metals are removed. Headwaters also markets a catalyst-based system that converts natural gas to liquid fuels, and heavy oils to lighter fuels.

"The heavy oil conversion process is especially valuable because it can use waste oils, sludge, and other low-grade petroleum sources that would otherwise be discarded. End products from the process include
jet fuel and heating oil in addition to gasoline and diesel.

"Along with the company's conversion technology, Headwaters supplies hardware, reagents, catalysts, and various consumables to its customers. The company deals primarily with large electric utilities and coal producers. Several commercial energy companies also use Headwaters' technology.

"In addition to its high-tech products, Headwaters manufactures building blocks, stucco, and mortar from fly ash and other byproducts from burning coal. This business is being hurt by the housing plunge and the weak commercial real estate market.

"As a result, the company's stock has been on a 12 month slide. Last year, Headwater's CEO Kirk Benson was asked to peer into the future to predict which of the company's business segments are likely to be the biggest growth drivers.

"He said the coal-based products and the technology divisions will have growth rates that exceed the building products division, and would exceed all the other company businesses within 10 years.

"That's good news for investors who can buy the company today at a price based upon its troubled building
products business. However, this speculative stock should be purchased a little at a time because it could go lower before it starts what I think will be a long recovery."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.

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