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A Big Upgrade for Westport Innovations

By Dave Mock – Updated Apr 6, 2017 at 12:36PM

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This bullish call comes from more than just one analyst.

After spending much of the past six months at a mediocre three-star rank, Westport Innovations (Nasdaq: WPRT) has impressed enough top-performing members of our 165,000-strong Motley Fool CAPS community to regain its four-star luster. A total of 147 members have given their opinion on the alternative fuel engine developer, with many offering analysis and commentary explaining the recent optimism.

With Westport strengthening its position in a growing market for alternative fuel vehicles, many CAPS members like the growth possibilities. It reported a 35.7% increase in fiscal fourth-quarter sales and sees many positive developments taking place in the market for natural gas vehicles (NGVs).

Recently introduced legislation in the U.S. could help spur the adoption of NGVs, and the company is bullish on the continuing discoveries of natural gas shales loaded with resources, which will serve to provide a cheap source of fuel for its customers for the foreseeable future. The race for natural gas in North America has also attracted foreign investment like Reliance Industries’ joint venture agreement with Pioneer Natural Resources (NYSE: PXD) and Encana’s (NYSE: ECA) deal with PetroChina.

While Honda (NYSE: HMC) is the only major automaker selling a dedicated compressed natural gas car in the U.S., activity could be picking up in the commercial vehicle sector. Ford (NYSE: F) expects to soon offer engines that run on natural gas or propane for its F-450 and F-550, and General Motors looks to sell natural-gas-powered vans for fleet owners. For its part, Westport recently received Environmental Protection Agency 2010 compliance for one of its heavy-duty engines that could power many vehicles coming to market in the future.

Things are also looking good on the international front. While peer and partner Clean Energy Fuels (Nasdaq: CLNE) recently agreed to acquire IMW Industries to expand in emerging markets, Westport will boost its global presence with the purchase of OMVL of Italy and the remaining interest in Juniper Engines. Investors don't have to look far to see the global potential for natural gas technology, as natural gas component maker Fuel Systems Solutions (Nasdaq: FSYS) -- which does significant business in international markets -- recently reported first-quarter revenue that more than doubled over the prior year.                           

Do you think Westport Innovations deserves its raised status? Add your thoughts in the comments box below, or head over to CAPS to rate the company.

Always looking ahead, the Motley Fool Rule Breakers service is picking the next generations' big winners today. To see what other rule-breaking stocks David Gardner is recommending now, take a free 30-day trial.

Fool contributor Dave Mock wishes he could upgrade his bicycle with a technology-based alternative to pedaling. He owns no shares of the companies mentioned here. Ford Motors is a Stock Advisor recommendation. The Fool's disclosure policy is solar powered and carbon negative.

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Stocks Mentioned

Ford Motor Company Stock Quote
Ford Motor Company
F
$12.31 (-3.60%) $0.46
Honda Motor Co., Ltd. Stock Quote
Honda Motor Co., Ltd.
HMC
$23.52 (-1.80%) $0.43
Clean Energy Fuels Corp. Stock Quote
Clean Energy Fuels Corp.
CLNE
$5.33 (-7.14%) $0.41
Westport Fuel Systems Inc. Stock Quote
Westport Fuel Systems Inc.
WPRT
$0.93 (-4.14%) $0.04
Pioneer Natural Resources Company Stock Quote
Pioneer Natural Resources Company
PXD
$208.99 (-7.79%) $-17.66
Ovintiv Inc. Stock Quote
Ovintiv Inc.
OVV
$42.62 (-8.91%) $-4.17

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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