Just over one year ago, a small Canadian company made headlines when it struck an important deal. The deal? Westport Fuel Systems (NASDAQ:WPRT) would be supplying natural gas engines to Amazon (NASDAQ:AMZN). That caused WPRT stock to shoot up at the time. However, until this week, Westport had since seen a quiet year. Now, though, shares are back in the green by impressive amounts as the oil price boom continues to boost stocks across the sector.
After an unexciting week so far, WPRT stock began rising steadily this morning. It hasn’t stopped yet. As of this writing, the shares were up more than 52% for the day and are now fluctuating in after hours trading.
A small-cap company, Westport hasn’t traded above penny stock levels since 2015, when it briefly surpassed $6 per share. Further, WPRT stock peaked at its all-time highest in 2012, back when it reached nearly $50 at one point. Since then, though, no price spikes have generated any sustainable growth. But even a company that has struggled that much can ride the current oil price wave, as Westport is proving.
What’s Happening with WPRT Stock?
According to its webpage, Westport is focused on engineering clean fuel systems. The company designs and manufactures parts for natural gas engines. Furthermore, its business dealings span over 70 countries and include partnerships with prominent automotive brands like Ford (NYSE:F) and General Motors (NYSE:GM).
Of course, Westport isn’t a name that typically comes up when investors consider energy plays. Still, although WPRT stock may trade at low levels, the company is dynamic. It features a wide variety of brands that produce many different automotive and gas components.
Looking forward, it’s uncertain how high gas prices will rise and how long the current surge will continue. However, experts predict that both gas and oil prices will keep climbing for at least the coming months.
This bodes well for component companies like Westport. While they do not produce the commodities rapidly rising in price, they do supply components needed for the machines that they power. Westport’s dynamic portfolio of brands positions it well to demonstrate utility in the face of an expanding oil boom. Additionally, the company is based in Canada, a country that may soon be tapped to start supplying oil to the United States.
What It Means
U.S. oil markets are about to see a tremendous shift. Today, President Joe Biden confirmed the country will be banning Russian oil imports. And, regardless of who the country’s oil and gas is supplied by, the need for natural gas engines won’t go away anytime soon.
Finally, it’s worth noting that penny-level names like WPRT stock also often prove to be undervalued. As such, investors still looking for an energy play shouldn’t overlook it.
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On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.