Hit the Gas on Westport Innovations

by Sam Collins | March 15, 2013 1:30 am

Westport Innovations (NASDAQ:WPRT[1]) — This global leader in the manufacturing of natural-gas engines uses innovative alternative-energy technology that allows diesel trucks to run on natural gas.

The company has suffered a string of losses, but those who believe (as I do) that a major change is about to occur in the use of natural gas vehicles should consider this stock.

On Nov. 15, Deutsche Bank initiated coverage of WPRT with a “buy” rating, saying “We believe risk-reward is attractive at current levels.”

Also in November, the company announced a unique on-board storage solution. The company said its newly developed LNG Tank System is expected to provide the ability to fuel even the largest spark-ignited engines on a single tank of LNG and reduce the overall fuel costs and weight “dramatically with a single-tank option.” In December, it was announced that Westport would provide natural-gas-powered versions[2] of the Ford (NYSE:F[3]) F-450 and F-550 Super Duty trucks in mid-2013, and truckers in Canada recently have begun installing the system.

And on March 8, it announced an agreement with Knapheide, the leading full-service commercial vehicle body maker to engineer custom bodies for Ford trucks.

Westport expects consolidated revenues to come in between $180 and $200 million, up 16% to 29% for 2013.

Technically, the stock reversed its long-term downtrend by breaking through its bearish resistance line at $28 and jumping to $32.89. Our “Buy Under” price is still $30, but the stock is completing a reversal, so potential buyers should jump aboard WPRT now. The near-term trading target is $38. Long-term buyers could see substantially higher returns.

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Trade of the Day Chart Key[4]

  1. WPRT: http://studio-5.financialcontent.com/investplace/quote?Symbol=WPRT
  2. would provide natural-gas-powered versions: http://www.westport.com/news/2012/expand-ford-super-duty-product-line-natural-gas-powered-f-450-550-available-in-2013
  3. F: http://studio-5.financialcontent.com/investplace/quote?Symbol=F
  4. [Image]: https://investorplace.com/wp-content/uploads/2011/04/chart-key.gif

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