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.
Why it's happening: Westport Innovations announced today that it will offer a compressed natural gas Westport WiNG Power System for the 2016 Ford F-150. The product will be unveiled today at the Alternative Clean Transportation Expo in Dallas and will come in dedicated or bi-fuel systems. As a qualified vehicle modifier, the system won't affect existing Ford warranties, which is a big key for those looking into the move to natural gas.
Westport Innovations has been trying to push the conversion of truck fleets to natural gas, and having this as an offering is a good step in that direction. But low oil prices have made the switch to natural gas less compelling, resulting in a 20% decline in revenue and a loss of $150 million.
Having solutions like this is key for Westport Innovations long term, but I'd like to see some fundamental improvement on the income statement before getting too excited about it. Customers need to start adopting natural gas fuel for future F-150s for the real value to accrue to shareholders, and I'd like to see evidence of rubber hitting the road before I jump in.