Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What's happening: After shooting up 19% on Monday -- and a crazy 73% since Feb. 1 -- Westport Innovations (NASDAQ:WPRT) shares are down 16% as of 3:15 p.m. EST on Feb. 10.
Why it's happening: As I wrote yesterday, Westport Innovations' stock is probably going to be very volatile for the foreseeable future. Today is another "no-news" day, with the most likely and obvious catalysts being another drop in oil futures, with Brent crude down almost 3%, while natural gas prices are up almost 5%. What does that have to do with Westport? In short, the company's business is largely based on the cost benefit of natural gas versus diesel, so the "spread" between the fuels is critical to the viability of vehicles that feature Westport technology.
However, even that probably only touches on what's going on with Westport's stock. The company's market cap has fallen to just over $300 million, so it doesn't take a lot of action for the stock to get jerked all over the place. Factor in a heavy trading day -- so far today, 6 million shares have changed hands, compared to a three-month average of 1 million -- and it's easy to see why the big move.
In this case, It looks like a lot of sellers are cashing in on the big run-up over the past week. Looking ahead, let's be honest: There is absolutely no telling what the stock will do tomorrow or next week. Long-term investors, buckle up: It's going to stay bumpy.
Jason Hall owns shares of Westport Innovations. The Motley Fool recommends and owns shares of Westport Innovations. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.