Today I would like to come back to a company I initially talked about investing in back in June. That company is Westport Innovations. If you have haven’t read the article I wrote about Westport follow this link back to June 13th.
http://stockmarketmonster.blogspot.com/2010/06/can-you-say-westport-innovations.html
Okay so yesterday after the market closed Westport Innovations (WPRT) reported earnings for the 1st qtr of fiscal 2011 a net loss of (-$0.21) a share beating analyst expectations by $0.01 on revenues of $25.5 million compared to a year ago of $21.8 million that’s a 17% increase. Not to bad. Although the revenue didn’t meet analyst expectations of $32 Million I listened to the conference call and a few large orders of product missed the cutoff to report on this quarters earnings. That is why they missed on revenues.
The CEO David Demers was very upbeat. The tone of his voice gave me an indication that good things are still yet to come for WPRT. Westport is on track to meet their expectations for earnings on the year. Nothing has changed and they have a lot of business in the pipeline.
Recently if you have been watching this stock it ran up drastically to hit a 52 week high of $21.34 and has been taken down to $18.18 or about 15%. The reason behind this move was the excitement that the Senate was going to pass an energy bill that is beneficial to Westport. After the bad news that the Senate was going to postpone the bill for further discussion after the Senate break (little vacation) the short term catalyst came to a screeching halt.
Although this wasn’t positive news David Demers continues to see a lot of orders and pent up demand for Westport’s engines in North America awaiting the energy bill. This energy bill will help give direction to companies on what to expect for the future of energy. The monetary incentives alone for natural gas conversion is one of the reasons companies are standing on the sidelines. If the law passes it would be a no brainer for companies to take advantage of the incentives along with the bonus of trimming fuel costs substantially by taking the natural gas route. Yes this would be a huge win for Westport, but they also do business in Canada, Australia, Europe, and China. That means this business is growing with or without the energy bill.
This company has a great long term growth story. I have recently over the passed week personally invested my own money in this company. This is a perfect time to buy now that the excitement of the possible passage of the energy bill has been postponed. Any stock bought between $16.00-18.00 is a good buy.
Look at it this way. An insider purchased 500,000 shares at a price between $17.66-18.79 on July 14th a little less than 3 weeks ago. That’s $9.3 million in stock. You can get in at the same price as this insider. Remember insiders buy stock to make money and show confidence in their company. An insider investing a substantial amount of money is definitely positive for any stock.
My recommendation is to see what happens tomorrow with the July nonfarm payrolls report to see if the number is positive or negative. If positive buy a little over the next few days. If the number is negative it will be a gift as stocks will most likely head lower and you will be able to buy Westport (WPRT) on the cheap. Oh yeah remember never buy all at once!
Have a great night!
Clay-
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