Why Westport Is Ready to Rebound

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, alternative fuel technologist Westport Innovations (NASDAQ: WPRT  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Westport and see what CAPS investors are saying about the stock right now.

Westport facts

Headquarters (founded)

Vancouver, Canada (1995)

Market Cap

$1.7 billion

Industry

Construction and farm machinery and heavy trucks

Trailing-12-Month Revenue

$149.7 million

Management

Founder/CEO David Demers

CFO William Larkin

Trailing-12-Month Return on Equity

(29.7%)

Cash/Debt

$173.9 million / $77.3 million

Competitors

Cardone Industries

Jasper Engine Exchange

New Flyer Industries

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 98% of the 1,905 members who have rated Westport believe the stock will outperform the S&P 500 going forward.

Just last month, one of those Fools, TMFInnovator, succinctly summed up the Westport bull case for our community:

This will take a while to play out, but Westport knows what they are doing.

-WPRT is using the joint ventures as proofs-of-concept that their natural gas engines are more economically efficient and environmentally friendly than diesel engines.
-Once they develop a sufficient amount of data, the biggest players will start to convert their trucking fleets over to Westport's high-pressure direct injection (HPDI) technology. ...
-Once this happens, watch for the company's "On-Road Systems" segment to take off. ...

The biggest risk is that the engine manufacturers learn enough from Westport to develop their own, superior technology. If that does happen, WPRT loses their IP competitive advantage and all related royalties. That would be very bad.

But overall, this is a capital-light business with a huge tailwind, and they seem to be taking the right steps for long-term success.   


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