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Cleantech stock watchlist
| Junior Cleantech Stock Highlight: Westport Innovations Inc. (WPT- TSX) |
| Company Name: |
Westport Innovations Inc. |
| HQ Location: |
Vancouver, British Columbia |
| Company Website: |
www.westport.com |
| Shares Outstanding |
32.81 Million |
| Market Cap: |
$443.9 Million |
| 52 Week Range |
$3.89-$13.80 |
| Average Daily Volume |
88,895 |
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Share Highlight / 1-Year Stock Chart
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Business Overview
Westport Innovations Inc is a research and development company involved in developing fuelling technology to reduce emissions by adapting current diesel engines and by developing new engines to use compressed natural gas (CNG), Liquefied natural gas (LNG), bio gas or hydrogen, while retaining the performance of conventional engine. In addition to proprietary technologies, the company has the extensive market and industry knowledge required to transition commercial and municipal fleets from oil-based fuel such as diesel to natural gas.
The company has four Joint ventures and partnership agreements with major engine and automobile manufacturers. Cummins Westport Inc, a JV with Cummins Inc. (NYSE:CMI) develops and markets low emission, high performance truck engines. Juniper Engines a JV with OMVL SpA (Italy) focuses on small LPG and CNG engine solutions for industrial applications such as forklifts, BTIC Westport Inc., a JV with Beijing Tianhai Industry Co. Ltd. (BTIC) of China, to market and sell more cost-effective, custom-engineered tanks for liquefied natural gas (LNG) for the transportation market, Weichai Westport Inc., a JV with Weichai power corp (China) focuses on developing heavy-duty engines in China and other partners include Volvo trucks of Sweden, Paccar(NASDAQ:PCAR), Cryostar (France) and Ford.
What is interesting?
- A cleantech company with proven technology that addresses both economic and environmental issues. Natural gas engines are not only environmentally friendly with fewer emissions, but also cheaper to operate than diesel engines.
- Valuable joint ventures and partnerships with major engine and automobile manufacturers.
- Presence in key emerging markets, in China Westport has 2 JVs and in India it works with Cummins, which offers long term potential and huge markets. Company recently won a contract to supply bus engines in India, a country that is a global leader in production and implementation of CNG engines for public transport
- Rapidly rising revenue- Revenues have increased by 24 % in 3rd quarter fiscal 2010 compared to same period last year, shows company is in path to profitability.
- With natural gas prices still low with abundant supply, natural gas engines may become the future for automobile industry. More over other green technologies focus mainly on cars and light trucks, natural gas is focused on trucks, heavy duty vehicles and even locomotives
- Westport’s technology can be adapted to current fleet of diesel vehicles and natural gas engines and is in more mature and developed stage compared to other technologies. This offers them huge potential markets, as fleet owners can adapt their current vehicles to use CNG
- Westport’s technology can be used not only with CNG, but also with LNG, Biogas and can be used as a bridge to future hydrogen powered engine technology.
- With few green solutions for commercial vehicles, there is a huge potential market for Westport’s solutions.
- Increasing customer base- Westport recently signed agreement to supply Cummins Westport natural gas engines to Kenworth Truck Company
- With tighter vehicle emission regulations and government incentives to go green mean auto manufacturers and fleet operators are looking for cleaner alternatives and Westport has proven technological solution for them
- In a goal to reduce petroleum consumption in transportation, federal governments in US and Canada have announced special programs like the Department of Energy’s “Clean Cities” program, which will support Westport’s growth.
Risks
Like many other cleantech companies Westport is still not profitable and has high research and development costs. The company might require to access capital markets to raise additional capital, which could potentially result in shareholder dilution. Market for natural gas-powered trucks is still small and with relatively stable oil prices many fleet owners are still not considering to make a move to natural gas. Other issue that are stopping the trucking companies from moving to NG is lack of refuelling infrastructure, as there are not many NG refuelling stations across the country. These can lead to delay in acceptability of clean fuel solutions offered by Westport and can adversely impact its growth.
Note: This Clean Tech stock watchlist was brought to you by SmallCapPower analyst "Raj Ravindran"
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