Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Tesla Motors Inc (TSLA), Westport Innovations Inc. (USA) (WPRT): Joint Ventures Hiding Growth

Page 1 of 2

Throughout 2011 and into 2012, the high cost of oil-based fuels and the low cost of natural gas stoked excitement over several stocks designing vehicles that run on alternative energy. Among this crowd, two companies have really stood out — and ironically, they’ve taken opposite directions during the last year, providing a potential catch up period for the laggard.

Westport Innovations Inc. (USA) (NASDAQ:WPRT)

With a focus on natural-gas engines for trucks, Westport Innovations Inc. (USA) (NASDAQ:WPRT) soared into the start of 2012. But the stock has spent the last 18 months losing 40% of its value. Conversely, Tesla Motors Inc (NASDAQ:TSLA) focused on building premium electric cars and had a more muted stock performance before its well-discussed 400% gain over the past 12 months. Now, the question is whether Westport Innovations Inc. (USA) (NASDAQ:WPRT) can reignite its previous excitement, and catch up to Tesla Motors Inc (NASDAQ:TSLA)’s gains.

Are investors fleeing Westport Innovations Inc. (USA) (NASDAQ:WPRT) ‘s stock just as the catalyst to own it hits production? Will the Cummins Inc. (NYSE:CMI) jointly developed engine reignite the growth that sent Westport’s stock soaring in 2011? As is the case with many new technology developments, the market gets way ahead of the concept before eventually capitulating, right as the catalyst for its shares’ rise actually hits the markets.

New Cummins engine
The regional-haul natural-gas trucking market has been idling for a few years while it awaited the much-anticipated Cummins Westport Innovations Inc. (USA) (NASDAQ:WPRT) ISX12 G 12-liter engine. The 400HP version of the engine operates exclusively on natural gas (compressed or liquefied) using a proprietary spark-ignited technology.The engine, based on the Cummins Inc. (NYSE:CMI) 1SX12 diesel platform, is just what the regional-haul trucking industry needs for highway use.

Ironically, the stock hit multi-month lows just as the engine hit production in August — an engine expected to boost sales for the Cummins Inc. (NYSE:CMI) Westport Innovations Inc. (USA) (NASDAQ:WPRT) JV. Clean Energy Fuels has consistently listed the engine as a necessary catalyst to boost demand for the fueling stations it’s building along the U.S. highway system.

Production of the new engine isn’t expected to reach a commercial run rate until the end of the year, but even before that ramp-up, the joint venture sold 38% more units year over year during the second quarter. Still, that only translates into 2,716 engines, which provides plenty of upside for Westport Innovations Inc. (USA) (NASDAQ:WPRT)‘s future growth. Right now, LNG engines are only listed as around 1% of its total sales.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!