Westport Innovations (NASDAQ:WPRT) — This global leader in the manufacturing of natural gas engines uses innovative alternative energy technology that allows diesel trucks to run on natural gas. Management recently cut the 2012 revenue outlook from $400 million to $340 million, and the company has had a string of losses. But bottom fishers who believe as I do that a major change is about to occur in the use of natural gas vehicles (NGVs) should consider buying this stock.
On Nov. 15, Deutsche Bank (NYSE:DB) initiated coverage of WPRT with a “buy” rating saying, “We see an inflection point for NGVs from 2013 as engine technology [advances]… we believe risk-reward is attractive at current levels.”
Then, on Nov. 26, the company announced a newly developed, unique on-board storage solution, which is expected to give the ability to fuel even the largest spark-ignited engines on a single tank of liquid natural gas, and reduce the overall fuel costs and weight “dramatically with a single-tank option.”
And, on Dec. 3, it was announced that Westport would provide natural gas-powered versions of the Ford F-450 and F-550 Super Duty trucks in mid-2013.
Technically, this very volatile stock appears to have made a bottom along an extended base at $23. The MACD is flashing a “buy” signal, and on Tuesday, the stock pierced its 50-day moving average at $27.82 for the first time in four months. The near-term target could be as high as the mid-$30s, and long-term buyers could see substantially higher returns.