Clean Diesel Technologies, Inc. (NASDAQ:CDTI) Has More Room To Run

Today, we need to talk again about Clean Diesel Technologies, Inc. (NASDAQ:CDTI), which is focused on providing solutions to the automotive emissions control markets.The company's stock price jumped quite a bit on November 16, 2017. From close to $1.25, the share price spiked up and crossed the $2.25 share price level. For those who need a calculator, that is a 80% jump in only one session.But, that is not all.Market interest in the stock has also increased, because the volume also increased. More than 5 million shares changed hands.Have a look at the following stock chart and form your own opinion before we provide ours: 2 months chart for CDTIOur regular readers remember this name, as we have assessed it many times. We are glad that we did so. In our previous report, we noted that the company was gaining a lot of popularity in the market. We said the following regarding this matter:

"The company’s recent share price action seems to have interested many market participants, which increased our curiosity. Forum participants on Seeking Alpha and iHub commented on the stock. The most popular was Yahoo Finance, which shows 531 reactions as of October 15, 2017." Source

Additionally, we said that the Board was undertaking a transformative process and different market participants including insiders had acquired big stakes in the company.We are revisiting rapidly the company's business model for those who don't know this name. CDTI, founded in 1996 and headquartered in Ventura, California, provides global vehicle emissions control systems. The company operates two divisions; the Heavy Duty Diesel Systems division and the Catalyst division. We believe that the key feature in this company is its patented intellectual assets. Additionally, we also appreciate that the company's products have been reviewed by the US Environmental Protection Agency.What's new? - Third Quarter 2017 Financial ResultsThe news that seemed to create the share price spike was the Q3 2017 financial results, and the conference call given by the management. The good news was that emissions control systems revenue and the technology and advanced materials revenue increased.Let's first of all deal with the financial figures reported. Total revenue for the quarter was $6.9 million, while the company made $10.1 million in revenues in Q3 2016.The gross margin was 22%, while the company reported a gross margin of 27% in Q3 2016. It was explained by an increase in overhead expenses and lower sales. Finally, we need to go to the bottom line to see that the company made a better quarter than in 2016. The net loss in 2017 was $0.02 per share, while the company reported a loss of $2.14 per share in 2016.The market did not become excited because of the financial figures reported. We believe that the operating highlights were the most significant. Have a look at the following words of Matthew Beale, CDTI’s CEO:

“We completed our business realignment with the sale of our downstream distribution activities in the North American aftermarket, secured our first Chinese OEM vehicle platform for our advanced materials and signed a joint development agreement with a major global OEM focused on material systems for catalyst applications.” Source

But, there is more about joint development agreement with a major global OEM. We had a look at the conference call transcript and found very interesting news.

"We recently signed a joint development agreement with a major global OEM to pursue catalyst design opportunities that include our technology. While clearly very early stage development work, the commercial ramification for CDTi would be transformative as it could involve the deployment of our technology in several million vehicles a year." Source

"Several million vehicles a year" could mean a lot of new revenues for the company. It is a pity that the name of the OEM was not given because of confidentiality. Other market participants in the Yahoo Finance forum claimed that the reason for the share price spike was the new JV agreement: Yahoo Finance - Clean Diesel Technologies, Inc. NASDAQ:CDTIBalance Sheet - Less financial riskWe want to highlight that the company has reduced quite a bit of its financial risk in 2017. The new balance sheet situation shows that the total amount of liabilities was reduced from approximately $16 million to less than $8.9 million. Shareholders of the company should appreciate this fact. Balance Sheet Clean Diesel Technologies, Inc. NASDAQ:CDTIMarket participantsWe were glad to see that no market participant sold shares of the company. Even after the last share price increase, the market participants are not booking profits, signaling they believe there's more room for CDTI to run.HolderSharesDate Reported% OutValueLuther King Capital Management62,500Sep 29, 20170.40%109,999Vanguard Group, Inc. (The)59,813Sep 29, 20170.38%105,270Geode Capital Management, LLC38,855Sep 29, 20170.25%68,384Millennium Management LLC29,697Sep 29, 20170.19%52,266Blackrock Inc.26,889Sep 29, 20170.17%47,324SourceThe same applies to insiders of the company. Have a look:NameSharesDate ReportedKANIS S.A.4,962,908Aug 24, 2016BELL LON E590,494Dec 15, 2016BEALE MATTHEW87,188Dec 15, 2016KERN TRACY A10,000Dec 15, 2016SourceConclusionCurrently trading with a market cap of $31 million, CDTI is an exciting story among small caps. Like it happened on other occasions, a new agreement with a major global OEM is making the share price increase. If we take into account that the company has a low foat, we can understand why the share price volatility is high.To sum up, keep a close eye on CDTI. There's a lot to like.Be sure to check out our coverage on CDTI!We will be updating our subscribers as soon as we know more. For the latest updates on CDTI, sign up below!Image courtesy of MIKI Yoshihito via FlickrDisclosure: We have no position in CDTI and have not been compensated for this article.