# Westport Innovations (WPT:T)



## SlowandSteady60 (Feb 19, 2012)

Good Morning,
I was wondering if anyone has thoughts on Westport Innovations. This comapny is skyrocketing at an alarming rate and not sure why. They have a unique product and have teamed with some industry giants but are waiting for a bill to be passed before it can really take off. They are involved in light duty and heavy duty fuel injection and not really making large profits just yet. What am I missing. This stock has risen dramatically over the past twelve months. Can we expect this to continue? Is it too late to buy in? Thank you in advance for your thoughts.


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## PMREdmonton (Apr 6, 2009)

SlowandSteady60 said:


> Good Morning,
> I was wondering if anyone has thoughts on Westport Innovations. This comapny is skyrocketing at an alarming rate and not sure why. They have a unique product and have teamed with some industry giants but are waiting for a bill to be passed before it can really take off. They are involved in light duty and heavy duty fuel injection and not really making large profits just yet. What am I missing. This stock has risen dramatically over the past twelve months. Can we expect this to continue? Is it too late to buy in? Thank you in advance for your thoughts.



This is a speculative play based on intellectual property they have on converting gasoline to natural gas engines, mostly for industrial/heavy equipment and truck fleets. Due to the huge drop in natural gas prices and the rise in oil the fuel cost of nat gas engines is about half of that for diesel. Some major companies have now signed on with them to make ng engines for their vehicles (CMI, CAT, F, UPS).

The stock has taken off in anticipation of huge ramp up in demand once the US passes the Natural Gas Act which will incentivize businesses to convert to NG engines by offering a subsidy or tax incentive.

This stock is potentially a big gainer but you also have to remember that they have never been profitable and already have been bid up to a pretty high market cap compared to revenues for an industrial type company.

I do think there is value in the company but the valuation is sky high. I would say it is quite speculative but could be a huge gainer because of the glut of NG in North America and the geopolitical risk with the Middle East and ongoing oil scarcity.


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## OptsyEagle (Nov 29, 2009)

My problem with these story stocks is trying to determine what exactly the story is worth. I like the story, I just can't value it. If I can't value it, how will I know when to sell?

If you are good at technical analysis, it may be a useful stock, but I like to determine a value of something and then buy it cheaper. I can't do that with Westport.


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## SlowandSteady60 (Feb 19, 2012)

Does anybody know when this bill is supposed to come in front of Congress or is this something that has been on the books for a while. I'm kind of new at the stock game but I'm guessing that this would probably not be a good time to start buying. My son and I looked at this when it was around the $29 mark and he said I should have bought it. Guess what he's saying now. LOL


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## PMREdmonton (Apr 6, 2009)

SlowandSteady60 said:


> Does anybody know when this bill is supposed to come in front of Congress or is this something that has been on the books for a while. I'm kind of new at the stock game but I'm guessing that this would probably not be a good time to start buying. My son and I looked at this when it was around the $29 mark and he said I should have bought it. Guess what he's saying now. LOL



It has been on the docket for awhile and my guess is the Republicans are stalling it so that Obama can't get credit for it leading into the election.

My hope is that it begins to fall as shareholders get worried about whether the bill gets passed, especially if the Republicans take the Whitehouse.

I think the bill will eventually be passed but who knows when - maybe 2013?

I actually think the passing of the bill is mostly baked into the stock as this company has never been profitable and trades at a very high P/S ratio.

Again, I like this stock but not at this price. I was waiting for a pullback to 27 that never happened back in December.

Oh well, you just have to sit back and wait for the next fat pitch to come to the plate.


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## daddybigbucks (Jan 30, 2011)

i started a post on WPT a couple weeks ago and not too much interest on it here.

I figure the reason why its jumping up so much is that it trades on the NasDAQ and it gets lots of exporsure there. It trades about 20K- 60K on the tsx but 1M or more shares a day on the NASDAQ.

There is also low float of shares (~45M) and think it was a brilliant idea to do the reverse split a few years ago.

I think alot of people are just buying some shares and holding on until its bought out. This is artificially sending the stock skyward, probably to a point where no one will buy them out.

The financials are just brutal and they have a book value of about $3.

I bought some a couple weeks ago but i have a stop loss pretty tight, but im getting to a point now where im more comfotable if it does swing around.
It was rising $1 a day there last week which is just phenomenal to me.

i think natural gas it next next major fuel, so im bullish on this stock.

im waiting till the quarterlies come out but for some reason they didnt come out last week.

i remember being cocky to my father like your kid is being. But its alot different when you have to put your hard-earned money on the line after you've been burned.

At this point, i think its a gamble.


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## daddybigbucks (Jan 30, 2011)

its going to be interesting tomorrow. Advance earnings came out tonite and they are pretty ugly.
"Westport expects to report a net loss per share between $1.26 and $1.28. "

Biggest year end loss in the past 5 years and probably in the company's history.

Realistically, you would think this stock price would hit $35 tomorrow and $25 by next week.

But ill be holding.


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## SlowandSteady60 (Feb 19, 2012)

*Brave Soul*

I could have swore I posted on this earlier today but it didn't show up. That's the second time. Anyway, you are holding this you say and my only question is - why? I'm just curious after reading your post that you feel it is going to plummet and yet you hold. I did this with RIM and what a mistake that was. Good lesson for me though in knowing some profit is always going to be better than any loss. So if I might ask, do you have an exit number that you are waiting for? I'd love to see people keep making money off this stock but it has to fade shortly and rather quickly when it does. Good luck to you and hope you do well on it.


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## daddybigbucks (Jan 30, 2011)

The reason im holding is because this stock has all the signs of a full-on bull run.
Realistically i felt it should have dropped to $35, but people are too greedy to let it go.
WPT did what SLF did. They pre-warned of bad earnings to break up the sell off.

And so, we now have another quarter of new highs till the new terrible financials come out. Because this company doesnt run on profits, it is just going to come out with news releases and new contracts and its going to rise every time.

im really just going to hold on. I'll probably sell half when i double my money and just let the rest go.
this is a 100% pure bubble, and this has all the ingrediants to be huge.

but if it drops to $10, feel free to mock me.


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## SlowandSteady60 (Feb 19, 2012)

Well, as Danica Patrick would say "Go Daddy". I really hope it works out for you and honestly, I think you may be right. This stock could grow for a while on nothing more than speculation and hype. We shall see. Good Luck!


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## daddybigbucks (Jan 30, 2011)

SlowandSteady60 said:


> Well, as Danica Patrick would say "Go Daddy". I really hope it works out for you and honestly, I think you may be right. This stock could grow for a while on nothing more than speculation and hype. We shall see. Good Luck!


The bubble sure burst on this stock.
First, last month the stock hits $50 a share
then the feds come up with a vote against anymore Natgas incentives.
Stock drops
Another bad quarterly hit
Stock drops to $25 today.

Glad i knew it was a bubble and had the stop losses tight.
Don't think ill jump back into this one.


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## PMREdmonton (Apr 6, 2009)

daddybigbucks said:


> The bubble sure burst on this stock.
> First, last month the stock hits $50 a share
> then the feds come up with a vote against anymore Natgas incentives.
> Stock drops
> ...


Really? This stock is starting to get really interesting to me. They have great revenue growth, their losses are declining and they are on track to post a profit soon. While there are others entering the natural gas engine race none of them have the high pressure injection system that WPT has patented that allows nat gas engines to put out diesel like torque. This is what has made the stock such a story - they own the trucking and heavy duty engine segment for nat gas vehicles because of this huge advantage they have. Nat gas engines are going to catch on with truckers and fleets first because it is easiest to solve the lack of re-filling infrastructure first for these vehicles. The fleets can re-fuel centrally within the city. The truckers can do so along nat gas stations strategically put along the national interstate system in the US and Canada.

I wouldn't jump in right now as it is a runaway freight train and I think shorts have been piling in and driving this one down. I don't think it'll stabilize until the shorts start covering but given its ongoing unabated plunge they are still probably hungry to catch some more profits before they head for the exits. Right now $18 looks like a potential target for all the shorts to exit and I wonder if a strategically bought stock could ride up the short squeeze. Then you could sell after the shorters are done buying their shorts. The stock will cave again a bit as people who didn't sell on the way down try to ring out some gains to minimize losses and drive the stock down again maybe to 15-18 range. Then maybe can buy back in around 15.

Now just sit back and wait for the incoming mass conversion of trucking engines to nat gas and the earnings of WPT will take off and so will the stock.

The other thing to remember is they aren't entirely tied to the North American story. They also build engines with a Chinese partner and the Chinese have huge shale gas supplies that they are getting interested in tapping. They also have a big interest in getting their trucking fleets on nat gas.

WPT also has some other arrangements like with Caterpillar, Ford and Volvo to start building some engines for heavy equipment as well as small vehicles.

Overall, there is a lot to like about the company. The stock really got so far ahead of itself that I just couldn't justify dipping into it as it ran away from me when I stalked it at 28. Next thing I knew it was up at 33 then 37 then 39 .....

Right now I won't touch it - the technicals are just way too ugly but I'm keeping an eye on it.


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## daddybigbucks (Jan 30, 2011)

could be. 
did you read this story?
http://www.reuters.com/article/2012/03/14/us-usa-transportation-natgas-idUSBRE82C17420120314

That and the increase in nat gas may put too much downward pressure on it.
I would love for it to go under $10, then i would just buy a whack of shares and forget about it.

good luck, it could be a good long shot.
When negative news starts to accumulate. I usually walk away until something positive happens.


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## PMREdmonton (Apr 6, 2009)

daddybigbucks said:


> could be.
> did you read this story?
> http://www.reuters.com/article/2012/03/14/us-usa-transportation-natgas-idUSBRE82C17420120314
> 
> ...


Yes, I know that bill was defeated but it will probably come back in some form.

Natural gas prices will probably increase to some extent in the next while. The impetus to use it as a fuel source will eventually be fueled on the basis of an American energy security and independence initiative. The US will markedly decrease the need for imported oil if they continue to extract from shale oil plays and it they start getting more transportation vehicles to use natural gas which is much more abundant in the US than oil is. There is so much natural gas coming out as a result of the hydraulic fracks that are going on that the storage tanks got full. They need new avenues to use that abundant natural gas. The best way is probably to convert truck fleets to natural gas. The best way to get truck fleets to convert will be some form of a tax break. So I think the bill will be back in some form and will be passed in some form. Regardless, I do see the future of the US and Canada is to have truck fleets and long-haul trucks run on natural gas. It just makes too much sense for it not to happen and WPT has the best technology to allow it to happen.

However, while the company is doing fine, the stock is broken. It is dangerous buying a broken stock so I can't venture forth here even though I suspect money will be made for those who buy it at this current valuation. This has always been a growth story and the growth will continue unabated both here and in China.

I earlier had hopes of jumping on board via puts around 30 but the stock was just moving down way too fast with no sign of a bottom. So far now I just continue watching it plunge day after day.


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## PMREdmonton (Apr 6, 2009)

Now in buying range again for those who wish to step on-board.

With Obama in the lead and expected to win there may be more impetus to get some subsidies for NG engines that could really push this stock up. They continue to be the dominant player in the engine and I think the market now believes Cummins engine will not be a major threat to them due to deficient torque.

It has bounced from around here before and is about 4 dollars above the 52-week low.

I'm still on the sidelines but intrigued on this Canadian tech company. They have the joint venture with cummins, they signed a deal with Caterpillar earlier this year, they are working with CYD in China and they have signed several small deals with car companies (GM, Ford and Volvo I believe). Natural gas still looks plentiful in North American the T. Boone Pickens is continuing their efforts to build NG refilling stations along the interstate highways.

The volatility is just so crazy on this one that I'm afraid to step on board until we go a bit lower. I'd also be more reassured after an Obama victory is in the bag as the media/polls has gotten this one wrong before and there is still lots of time left in the race.


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## maxandrelax (Jul 11, 2012)

I put an order in yesterday but it wasn't filled. Better luck on Monday. I want to see some stronger volume on the buy side to go all in though.


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## GOB (Feb 15, 2011)

This is a compelling stock that might be worth stepping into around these levels. Anybody considered selling puts for some income while waiting for the right price? Premiums aren't terrible for a Canadian stock.


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## maxandrelax (Jul 11, 2012)

Got in today. It has been in a period of consolidation since November. Obooma was talking up nat gas in the SOTUnion last night and forced a pop first thing in the morning. Looking for it to break the 200mda in the next few days. 

Wonder if they will have an exhibit at the autoshow?


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## MoMoney (Apr 1, 2011)

What's going on today. Up 8% can't find any news at all.


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## maxandrelax (Jul 11, 2012)

I think it is because I'm in  No news, but Cramer has been blogging about a breakout... Earnings are due.


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## maxandrelax (Jul 11, 2012)

Also, there are rumours circulating that CMI Cummins is going to take them out.. but that is nothing new.


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