Westport Innovations (WPRT)
First I would like to Thank Jim Cramer for recommending WPRT and bringing this stock to my attention on Thursday June 3rd. I haven’t been this excited about the potential of a company since my first stock trade of Sirius Satellite radio, which was a money maker back when satellite radio was released to the general public.
The company I'm amped for is Westport Innovations. Westport Innovations develops and creates the technology for natural gas engines and the conversion of diesel engines to natural gas. The company has been around for quite sometime, but since the BP oil spill back in April this company has become much more attractive. The U.S. has been looking to reduce the consumption of energy and to find a fuel that we can replace or substitute so that we don’t have to rely on foreign oil. The U.S. was pushing a bridge fuel and leaning towards clean coal. Which is a funny thing to say as clean and coal shouldn’t be used together in the same sentence. There is no such thing as clean coal. Coal is dirty! That being said President Obama mentioned the word natural gas last Wednesday June 2nd as a way to reduce are oil consumption and veer away from foreign oil. That being said by President Obama is a step closer for natural gas to become a substitute for oil. Obviously this isn’t an endorsement by the government, but just having President Obama mention natural gas as an option could mean a better future for natural gas.
Below you will see my reasons for buying WPRT Stock.
1. Jim Cramer. I have to put him on the top of the list since he is one that brought WPRT to my attention. He is also the guy that I base a lot of my investing ideas on. I endorse all his books and many of his ideas. The guy is an extraordinary investor. He returned over 24% for his hedge fund back in his fund manager days. That means if you would have invested with him he essentially doubled your investment every 3 years. Those types of returns are legendary!
2. Natural gas is a possible substitute for oil and Westport has the technology to capitalize on the shift towards cleaner more efficient fuel consumption. They have the technology to convert diesel engines to run on natural gas.
3. The U.S. is always looking to reduce emissions in the air and natural gas burns cleaner and is more efficient than coal and other gas powered engines. The possibility for government endorsement of natural gas would put Westport in the driver seat for higher profits.
4. Has a deal with Cummings, Volvo, and Delphi. Westport has a joint venture with Cummings one of the largest truck manufacturers in the world to develop natural gas engines. Cummings builds the engines and uses Westport’s technology for natural gas. It’s a win/win for both companies. Westport has said to have the potential to produce 100,000 natural gas trucks in a short period of time. They wouldn’t have to spend a lot of money to ramp up production since they utilize other company’s facilities to create their product accordingly to the CEO David Demers. Other joint ventures include teaming up with BTIC, Juniper Engines, and Weichai.
5. Transport trucks consume more than 20% of the fuel consumed on the road per year. Natural gas is about $1.00 cheaper per an equivalent gallon of diesel. This will help cut cost for the transportation industry and increase profitability for the transportation companies.
6. WPRT Not only sells products in North America, but also reaches out internationally. With a company of this size offering products to countries around the world gives huge potential to grow revenues at a rapid pace. Currently Westport’s 5 year long term growth rate is at 30%. 30% is outrageous growth and this is what growth fund managers look for. Companies that can support this kind of growth will get a lot of attention from funds and essentially the price of the stock will move higher.
7. Only 8 Analyst are covering this company. This means that not everyone knows about this company. Only 86 Institutions hold stock in this company, which is very low. Once this company is discovered by more institutions the price will go up. That means by buying now you will be ahead of the big move once the interest is this stock gains momentum. Remember most of the money is made at the beginning of discovery. Once a stock become popular and well known the opportunity for huge profit is less likely.
8. A great investor has put his money on the line with Westport. Joe Soros has taken a large stake in Westport and is the leading institutional shareholder. Joe Soros is a phenomenal investor and is known for making money in stocks. Pay attention to this guy! Joe Soros should never be ignored.
9. This one is very important. Since February an insider Kevin Douglas has purchased 3,074,070 shares of WPRT ranging from $12.86 a share in February to a recent purchase of $18.18. Now the kicker is this gentleman purchased a total of 55,486,963.50 million dollars worth of stock. He is the largest shareholder is this company and has more shares than any institution or mutual fund. This is perfect example of someone that truly believes in the company and also a hint that Westport Innovations has just begun to grow and generate income for their shareholders. Whenever you see substantial insider buying this is always a good indicator that you may want to think about buying as well. Insiders buy when they feel the value of their company is undervalued and they see higher stock prices in the future. I definitely wouldn’t put 50 Million dollars on the line if I truly didn’t believe the company will perform better in the future. Remember insiders are just like us they invest to make money.
10. I’m investing my money in Westport Innovations. I truly believe this company has potential. With the American Power Act on the horizon and a little help from T Boone Pickens proposing the Pickens Plan I believe Westport will benefit from the shift towards utilizing a cleaner fuel for the U.S. and other countries wanting to reduce the consumption of foreign oil. With continued pressure on offshore drilling and the negative outcome from the BP oil spill I believe natural gas is a perfect substitute for oil.
11. Lastly, by moving towards natural gas, the U.S. will be able to tap into the abundant supply of natural gas. We will reduce are reliance on foreign oil and create a large number of jobs in the U.S. Also, natural gas has a great track record of being safely extracted from the ground. That means no more oil spills.
I have stated my case for the purchase of Westport Innovations (WPRT). It’s a buy in my book. I would like to acknowledge Jim Cramer, Yahoo Finance, TheStreet.com Eric Rosenbaum for writing the article on Joe Soros, and lastly the home page of Westport Innovations. This is where I derived all my ideas and research and give full credit for the material they have provided.
Here are a few links that helped me determine my decision
http://www.cnbc.com/id/15840232/?video=1512606812&play=1
http://www.westport.com/
http://finance.yahoo.com/q?s=WPRT
http://www.thestreet.com/_yahoo/story/10766495/1/why-george-soros-is-buying-westport-innovations.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
Remember that this is a small cap stock under 2 Billion in market cap and the volume of shares traded is very small. That means a large volume increase can send a stock like this through the roof. Please be careful and buy this company incrementally at different price levels as this is a very volatile stock. This stock was run up on Friday so please wait for the price to come back down before you purchase this stock.
Thank You,
Have a Question? Send Questions to wheatleycsmk@gmail.com
New Content every Thursday and Sunday.
Occasional Stock Market Commentary during the week.
Feedback Welcome!
Interested? Please become a follower
No comments:
Post a Comment