Westport Innovations +12.41% today

All I'm going to say is Westport Innovations (WPRT) up +30.70% in 4 days.  Looks like some big money is flowing back into this growth machine.  Keep a close eye on this fast mover.

Have a great night!

Clay-


Full Disclosure

Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)

I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!

Quick post... The pitfalls of growth stocks

So I made a big bet on Westport (WPRT) and thus far I have been wrong. LOL!  That's the risk you take when investing.  I moved in hard in the low 30's and have been punished by the short sellers.  Westport's earnings call for Q1 2012 on Tuesday was actually quite good in terms of progress.  I know they lost more money than they did vs. last year's quarter, but they are increasing sales quite nicely.  I think this stock has been taken down beyond what is right.  I know the nay sayers would argue that this company hasn't turned a profit in years, but you have to fuel the growth some how!  You need cash.. And enough cash is what they have.  If their wasn't progress than I would say the heck with this stock.  I believe Westport will surprise everyone especially the short sellers in the coming weeks.  I'm looking for a short squeeze in the near term.  There needs to be a catalyst to change the aggressive downward trend.  I'm confident WPRT's management will  have some good news to get the big fish investors back on board.  Plus a change needs to be made because I'm sick of losing money! 

I'm still a big Westport Innovations fan even if I lose a little cash in the short term.  I didn't expect this high growth engine to get cut in half in the past few months, but it happens to the best of them.  The thing with growth stocks is as followed...

When any negative news poses a threat to the growth of a fast growing company investors do not hesitate to turn on a once loved company.  The money will flow out like a huge hole in a boat and the short sellers will step in to accelerate the downturn.  When this happens the momentum takes over and stocks go down until the sellers are exhausted.  This is what happened to Westport.  Other growth companies have gone through the same thing.  Here are just a few stocks that had similar rapid downfalls.

Starbucks (SBUX)
Hansen Natural (MNST) AKA Monster Energy Drinks
NetFlix (NFLX)
Taser (TASR)

A few of the companies have rebounded nicely from when they plummeted, but rapid growth can't continue forever and neither can straight up stock prices.  It hurts to see your money slip through your hands from time to time, but the excitement of catching the next big trend is always worth the risk in my eyes.

Stay positive with WPRT.  Loyal shareholders will prevail.

Have a great night!

Clay-


Full Disclosure

Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)

I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!

Caterpillar 2012 Q1 Results

Caterpillar (CAT) had yet another record breaking quarter! That's right a record breaking quarter!  So what gives with the stock price?  I have yet to understand some of the price action of late, but the Peoria Powerhouse isn't one to shy away from.  I can tell you from the conference call that business is good. Real good!  The only thing that could have be taken as a negative is a slow down in China, but yet increased activity in the US should offset the current weakness. 

I know that China is always seen as a growth engine for business and that investors panic when they see the slightest bit of negative news coming out of China.  However, in Caterpillar's case there is no need to fret.  China is a very small portion of CAT sales.  Only 3%  Yes maybe later down the road China will be a huge growth driver for CAT, but as of right now I wouldn't put to much thought into the slow down in China.  Management has already put plans in place to reduce the glut of inventory in China to shift/export to other markets that are on allocation.   The US market performed very well and the oil and gas business is on fire!  On top of that CAT raised its 2012 profit outlook. 

Q1 2012 vs Q1 2011

EPS was $2.37 vs. $1.84 a 28.80% increase

Sales were $15.981 billion vs. $12.949 billion Another 23.41% improvement

Profit was $1.586 billion vs. $1.225 billion

Other positives of note was an increased backlog of Caterpillar products bringing the total from $29.8 billion to $30.7 billion, global mining business is strong in China, operating margins were solid, backlog in mining equipment, and a 73% increase in the resource industry.  That means mining!  Mining is huge for CAT at the moment and I don't see any slowdown any time soon.

From the numbers and conservative outlook I still believe CAT will be trading north of $130 a share by the end of the year.   CAT is still a solid buy in my book.


P.S.  I also listened to Weatherford's (WFT) conference call over the weekend and they are still good to go. They started off to a slow start, but business should pick up during the second half of the year.

Have a great night!

Clay-


Full Disclosure

Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)

I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!

Stock Talk In 150 Words Or Less

-Apple (AAPL) has yet another blow out quarter.  $39.2 Billion in revenues.  35.1 million iPhone’s were sold in the 1^st qtr of 2012.  Boom!

-Weatherford International (WFT) had a solid quarter.  Revenues came in at $3.6 Billion, which was 25.87% higher than the same quarter last year.

-On deck for tomorrow is Caterpillar the Peoria Powerhouse!  I’m very eager to see how well CAT did in the 1^st quarter.   I need some good numbers to blow past the 52 week high of $116.95.  At $108.40 its 29.15% off my price target by year-end of $140.  Let’s go CAT!!!

-Now after CAT is all said and done the plan is to listen to the conference calls to project the future trend of my closely followed companies

P.S.  Westport… What the heck!!!  All I can do is grit my teeth in disgust and wait patiently for the tide to turn.

Full Disclosure
Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT) Monster Portfolio
Kinder Morgan Energy Partners (KMP)

I'm not a licensed financial advisor. All recommendations is strictly my personal opinion and the information is intended for learning purposes only. Invest at your own risk!

I'm Back!!!!

I first would like to start out and say it’s great to be back!  Do to some unforeseen circumstances I was unable to blog for the past 4 weeks.  Unfortunately the past 4 weeks have been devastating to the stock market, at least for those stocks that I follow.  The only stock that held up was Apple (AAPL), which has pulled back off its high of $644.00 a share.  No worries as Apple can buck the trend of most markets as Apple is in a world of its own!

Earnings have started off pretty well and it appears as of today that buyers are starting to step back into the market.  The headlines have been pretty negative as worry that the economy is slowing in the US, China, etc, housing issues, high oil prices, European trouble, and banking issues to name a few.  If I listened to this garbage day in and day out I would never invest in stocks.  As an investor you have to look past all the negative news and filter out all the junk that is being put onto the news wires.  I scan each of my investments throughout the week and look for anything that could negatively impact the business.  If the story hasn’t changed I continue to own that particular investment.  Of course the price of the stock may go down during that period of time, but that is to be expected.  The reason I’m bringing the subject of negative news is mainly focused on the recent price action in Westport Innovations (WPRT)

Westport has been recently brought back down the earth.  After hitting an all time high of $50.19 on March 21^st 2012 it has plummeted roughly 33% as of yesterday’s close of $33.47 a share.  Talk about being punched in the gut!  Very disappointing!  This downturn could force someone to quit investing in stocks all together.  I’m here to tell you not to panic.  This has happened before too many high flying growth companies and they have rebounded nicely after a sharp downturn.   Since I started investing in Westport back in July of 2010 the stock has had extreme volatility.  On 4 occasions WPRT has went from peak to trough in excess of 25%.  Below is a list of date ranges to where WPRT traded crazy!

July 27^th 2010 high $21.34
Aug 25^th 2010 low $15.51

Equates to a 27.32% downturn

April 6^th 2011 high $27.90

June 8^th 2011 low $19.66

Equates to a 29.53% downturn

July 13^th 2011 high $28.05

Aug 8^th 2011 low $20.01

Equates to a 28.66% downturn

Sep 20^th 2011 high $34.23
Oct 4^th 2011 low $22.63

Equates to a 33.88% downturn

As you can see this isn’t out of the ordinary for Westport to trade from one extreme to the other.  Don’t worry about the wild price movements.  If negative news comes out that is detrimental to the company then I would be worried.  Yeah I would like to side step downturns, but sometimes they aren’t avoidable.  The story hasn’t changed for Westport.  I wouldn’t put too much time into the recent news that Cheniere Energy (LNG) is building the first LNG export facility in the US.  The US has an abundance of natural gas and one facility isn’t going to drive natural gas prices up over night.  As of today natural gas has hit an all time low of $1.95!  Some say it could hit $0.75.  Westport will still benefit even if the price of natural gas goes up 50% it’s still a $1.00 cheaper than a gallon of gas.  Also, remember that 150 fueling stations are being built as we speak to support the natural gas revolution.   That’s right millions of dollars are being spent on natural gas taking hold as a major alternative to foreign oil.  Be patient and WPRT will give back to loyal shareholders in the near future.

Clay-


Full Disclosure

Current Holdings:
Cosi Inc. (COSI)-Monster Portfolio
Caterpillar (CAT)
Westport Innovations (WPRT)-Monster Portfolio
Kinder Morgan Energy Partners (KMP)

I'm not a licensed financial advisor.  All recommendations is strictly my personal opinion and the information is intended for learning purposes only.  Invest at your own risk!