Westport Innovations ( WPRT) : Watch Only ! Don’t Invest

I am increasingly concerned about a business model that spends to enter markets like China and then returns to seek new capital because there simply are no profits in sight. Marking up parts is not what Westport or The Motley Fool promotes as the ” next big thing”.

Here is what I have been saying:

“This is a stock to watch not own. The company is one of several seeking to make money on natural gas transport but the goal is years away .See the article on the promotion of the stock to sell subscriptions to Motley Fool at http://www.amp2012.com

“Similarly – watch the potential natural gas conversion for trucking offered by Clean Energy and Westport Innovations. Westport has been ” touted ” by Motley Fool . Touted to gain paid followers – the bet has not paid off for the followers.”

HERE IS( are) THE  Argument(s) Today: my edited summary  from Bob the Investor comments

!)   Cummins They invest money and got part of the engine profits,part of putting on ng parts and a mark up on parts  SLOW To No Profits On Investment   Better to own Cummins who can buy through WPRT without a big investment in the WPRT systems or research.

2) In China(Weichai )
They got nothing on the engine . WPRT had to invest in part of plant that put ng on and got a mark up in parts and a partial profit of putting on parts
Because the Chinese business is so competitive little money was made or will be made
There are so many competitors that Westport systems which are costly – and the best may never be successful. That leaves Asia out.
3) Volvo they invested little and will just get a mark up in parts
4)  USA   Now they are going into cars
They will be the ones paying to have their system adapted
They will only get a parts mark up

In the USA they are now having to invest and in the future all deals will be just  supplying parts and parts mark up – not as much as they have been getting
Ng system pricing will come down in price as volumes increase
So they will be getting a smaller share of a smaller pie per vehicle and having to pay the ongoing research out of their own pocket
Gasoline engine and gasoline small vehicles will be getting much better gas millage so the need for ng will be less as millage improves or at least the gas engine will be more competitive for autos than it is for highway trucking.

The world or most of it does  not want the WPRT costly system
So WPRT  must quickly get its cost down and that’s what they are trying to do – Watch them but invest in better prospects.

Westport : Relying on Motley Fool PR and Cramer

English: CNBC’s “Mad Money with Jim Cramer” ca...

English: CNBC’s “Mad Money with Jim Cramer” came to Tulane University’s Freeman School of Business Oct. 19, 2010 to broadcast in front of a live audience as part of the show’s “Back to School Tour.” (Photo credit: Wikipedia)

As noted here there is a long term trend to natural gas as a real alternative to oil. However, Motley Fool ( in a run up to $40) and so many others have urged investors to climb aboard before the train is ready to leave the station. by that i mean that there is still little infrastructure to support natural gas vehicles on the road. the long term trend is in – profits are still years away .

  • Westport Innovations (WPRT +0.8%) enjoys a bump after Jim Cramer says WPRT iswell positioned as more trucks turn to natural gas.
  • CEO David Demmers tells Cramer that just 1% of all trucks in the U.S. are running on natural gas, but the trendline points to growth; many in the industry are racing to build the proper infrastructure to meet expected demand. (video)
  • Nat gas is cleaner and cheaper than diesel, and wide availability in the U.S. and China will make it a popular energy source for years to come, the CEO says.
  • WPRT also has a strong partnership with Ford, with its technology included in 11 vehicles and in the F-150 starting next year.

WESTPORT INNOVATIONS INC(WPRT:NASDAQ, US)

BuySell
27.56USDIncrease0.22(0.80%)Volume:
Above Average
As of 04 Sep 2013 at 11:36 AM EDT.
S

QUOTE DETAILS

Open 27.26 P/E Ratio (TTM)
Last Bid/Size 27.52 / 1 EPS (TTM)
Last Ask/Size 27.60 / 3 Next Earnings
Previous Close 27.34 Beta
Volume 300,264 Last Dividend
Average Volume 386,347 Dividend Yield 0.00%
Day High 27.65 Ex-Dividend Date
Day Low 27.05 Shares Outstanding 56.5M
52 Week High 35.40 # of Floating Shares
52 Week Low 23.01 Short Interest as % of Float
chart

NIKO Resources, Motley Fool and The AMP Hedge Fund

Mutual Funds for Dummies ... U.S. Funds at War...

Mutual Funds for Dummies … U.S. Funds at War — Too simple? (Monday, June 4, 2012) …item 3.. Music to Help Study and Work – 26:39 minutes … (Photo credit: marsmet545)

The AMP Hedge Fund tracks a good number of stocks for consideration – few as frustrating as NIKO . Great potential – but they used to say that about me.

My advice to myself is that it is better to be a little late into a position than to be early.

Thus we track NIKO ( NKO on Toronto) but haven’t taken a position. Years ago the stock was $ 114 and headed to $ 200 on the basis of massive potential . Natural gas discoveries in India , Indonesia and Trinidad. Swinging for the fences is not an investment strategy it is gambling.

Yet NIKO has the production in India – getting paid a below market rates to satisfy the election bets of the corrupt .

Track and watch and wait.

Similarly – watch the potential natural gas conversion for trucking offered by Clean Energy and Westport Innovations. Westport has been ” touted ” by Motley Fool . Touted to gain paid followers – the bet has not paid off for the followers.

Westport Innovations – Chuggin’ Along In Second Gear

 

Oct. 31

Tata/MDI CAT compressed air car

Tata/MDI CAT compressed air car (Photo credit: Wikipedia)

Westport Innovations  (WPT : TSX : $24.19

Management expects revenue growth for the year to be about 30%, down from its earlier expectations for 50% growth.

All in, revenue is expected to be between $340 million and $350 million, down from earlier guidance for revenue in the range $400- 425 million. Management cited a reduction in inventory by clients amidst economic worries and delays in the availability of liquefied natural gas infrastructure as reasons for the reduced guidance.

CEO David Demers said  ” We have a storong balance sheet and our asset-light business model allows us to remain competitively positioned. To help mitigate further contraction in overall transportation markets, we expect a number of key product launches in our automotive, trucking and off-road applications in 2013.”

Separately, the company also announced a deal with India’s largest auto company, Tata Motors to develop an engine for light- and medium-duty trucks and buses. Financial terms were not disclosed.

 

Westport Innovations – Update

English: Revenue stamp (2pi) for financing the...

English: Revenue stamp (2pi) for financing the construction of Hejaz Railway in the Ottoman Empire. Listed as No. 17a in W. McDonald’s Revenues of Ottoman Empire and Republic of Turkey. See also Ottoman Turkish Empire Revenue Stamps of the Hejaz Railway by Steve Jaques, Troy, 2009, pp.22 (Photo credit: Wikipedia)

Westport* (WPT : TSX : $39.13)
Westport* (WPRT : NASDAQ : US$39.04)

August 7

Shares of Westport Innovations jumped after the company reported their Q2/12 results. For the quarter, the
company reported consolidated revenues of $106.1 million compared with $44.9 million for the same period last year, an
increase of 136.3%.

Earnings were reported at a net loss of $6.1 million ($0.11 loss per share) compared with a net loss of $18.1
million ($0.38 loss per share) for the same period last year.

Breaking down its segments, WPT reported Westport Light-Duty (LD) revenue, which where up 182.2% to $30.7 million, Cummins Westport (CWI) revenue jumped 78.5% to $57.0 million with 1972 engines shipped, and Westport Heavy-Duty (HD) revenue was up 111.3% to $4.3 million with 75 systems shipped.

Service and other revenue was reported at $14.1 million.

CEO David Demers commented, “Key segments of the transport market have begun the inevitable shift from petroleum based fuel to engines powered by cleaner burning, low cost methane (natural gas), and Westport has a substantial presence in each market.” Demers also noted, “We are seeing strong growth in all segments and in all of our global markets, and despite challenging macroeconomic conditions, we expect this to accelerate as new infrastructure comes on stream over the next two years and as we launch new products, opening up significant new
addressable markets.”

Westport Innovations – Update

US truck - California 2007

US truck – California 2007 (Photo credit: Wikipedia)

June 6 2012

Westport* (WPRT : NASDAQ : US$27.02),

 

The AMP  WOULD NOT INVEST on the basis of the Cat deal – five years hence. Still the Motley Fool choice is a long term prospect for the nat gas vehicle play. Other opportunities exist for the here and now of the market recovery we predict.

Shares of Westport Innovations were up sharply after the company announced that it had signed a deal with Caterpillar (CAT) to co-develop natural gas technology for off-road equipment, including mining trucks and locomotives.

Caterpillar will fund the development program. When the products go to market, Westport expects to participate in the supply of key components. Development programs will start immediately for both new and existing engines, combustion technology and fuel systems. Commercial production is expected to begin in about five years. While the agreements initially focus on engines used in mining trucks and locomotives, the companies will also develop natural gas technology for Caterpillar’s off-road engines, which are used in a variety of electric power, industrial, machine, marine and petroleum applications worldwide.

Usage of LNG within trucking fleets, while still in its infancy, is growing. At current diesel prices, LNG provides a 22% fuel savings, which amounts of well over $20,000 per year for an average truck driver. Those types of savings have already seen several trucking companies make the switch to LNG or CNG. Vedder Transport, a milk hauler in B.C. already operates a fleet of 50 trucks all powered by LNG. There are some drawbacks to running an LNG rig, such as fuel evaporation and the special coolers needed at filling stations to keep the gas at -162 degrees Celsius. These limitations make it mostly suitable for long-haul trucks with large gas tanks. U.S. truckers spent more than $135 billion on fuel last year, according to American Trucking Association.

LNG trucks are also significantly more expensive than regular diesel rigs. Factoring in fuel savings and the extra initial purchase price, it is estimated that it would take between 3-5 years of usage to pay off the initial purchase price premium. An average highway truck engine has a 10 year life span. Truck makers are also gearing up for the coming wave of LNG rigs.

Paccar (PCAR, which manufactures trucks under the Peterbilt and Kenworth badge, expects the gas-powered-truck market share in North America to expand to about 20% in the next several years, up from about 6% now.

 

U.S.

 

 

Westport Innovations – Volvo Update On A Motley Crew Stumble : Improving

Volvo Cars logo

Volvo Cars logo (Photo credit: Wikipedia)

Westport* (WPRT : NASDAQ : US$26.58)

 May 22, 2012

Westport Innovations was in high gear, posting double-digit gains on news the global leader in natural gas engines, Volvo Trucks, unveiled its plans to launch a 13-litre heavy-duty natural gas engine featuring Westport’s high pressure direct injection (HPDI) technology. The product is scheduled to launch for the North American market in 2014. Under the terms of the agreement, Westport will lead the program, but each partner will contribute significant resources and pay for its own people and costs of the program.

When the product is launched, Westport said it will supply its HD system components for an agreed upon amount per engine, comparable to other such arrangements previously announced. “The partnership with the Volvo Group is an important product development program and will help meet the increasing demand for natural gas engines and vehicles in the heavy-duty market.” said David Demers, CEO of Westport Innovations.

As the price of gasoline at the pump continues to creep upward, more and more investors are beginning to pay attention to Westport Innovations, as they appear to be the only pure-play game in town when it comes to a legitimate transportation fuel alternative. Earlier this month the company reported Q1 results which highlighted by significant volume strength from CWI (1,900+) and   (151) shipments which drove Q1 revenues, while LD awaits the ramp of the Ford Motors (F)  wing later in 2012.

Management also reiterated that it remains committed to aggressively launching new products/markets, like the aforementioned 12L, driving near-term operating expenses higher. However we are neutral on the stock as the rapid pace of new product line introductions and volume growth necessitates accelerated investment and 12L launch tempers near-term margins.

 

 

Westport Innovations : Motley Crew Pick Stumbles

Ford Escape PHEV photographed in New York City...

Ford Escape PHEV photographed in New York City, USA. (Photo credit: Wikipedia)

May 14

Westport* (WPT : TSX : $25.44)

Westport* (WPRT : NASDAQ : US$25.43)

Trying to be ahead of the curve on this stock has been costly.Don’t try to guess where the market is heading – wait to see better results.

Motley Crew uses Westport as a top pick ( at a much higher price ) – as the ” future of transportation . Unfortunately, the company has only been able to ramp up this last year and that propelled it to less than 6000 units – a long , long way from a market leader. Regardless of American truckers wanting to switch to natural gas the lack of infrastructure deters many in the long haul business.

Last week, Westport reported Q1 revenues/GAAP EPS of $88.6 million/$(0.44)).

Overall, estimates were driven by relative outperformance by Cummins Westport (CWI) (~$13 million product revenue), with Heavy (HD) and Light Duty (LD) both relatively in line with expectations. Gross margin declined 720bps sequentially, reflecting the absence of milestone service payments under the Volvo development agreement (next expected in June quarter), product mix and increased warranty expense associated with the roll-out of newer engine models. CWI and HD shipment strength were a highlight in the quarter, while LD stands to benefit in 2012 from the Ford Motor (F)  Wing launch and a full contribution from Emer.

Management reiterated top-line 2012 guidance of $400-425 million, representing 50%+ Y/Y top line growth. The Y/Y revenue improvement is expected to be supported by organic growth across all three operating segments.

 Additional expectations:

 i) Westport LD gross margin in the mid 20%

 

range;

 ii) CWI (Medium Duty) gross margin 30-35%;

iii) Westport HD margins expected to gradually ramp from break even

 

levels, long-term target of 20-30% (favouring higher end of the range); and

 iv) ~$5 million in Ford Wing sales in 2012 (500 units at ~$10,000 ASP), Q2/12 launch.

 Volatility likely stays elevated for WPT in the near term. Two upcoming potential WPT catalysts in May:

i) Alternative Clean Transportation Expo (May 15-17 in Long Beach); and

 ii) WPT Investor Day – May 24 in New York City.

 

 

Shale Gas Changing Americas’s Future

Liquefied natural gas (LNG) tanker, section vi...

Liquefied natural gas (LNG) tanker, section view from front. (Photo credit: Wikipedia)

 

By Vaclav Smil

Before the end of 2005, the U.S. price of natural gas rose above $15 per thousand cubic feet (mcf), nearly 12 times the record low reached in 1995. Production was down by about 8% compared to 2001, news reports speculated about supply shortages, and gas companies were gearing for expanded imports of liquefied natural gas (LNG) from overseas. Six years later, by the second week of April 2012, the market price of U.S. natural gas fell to less than $2 per mcf (to levels not seen since January 2002), nationwide gas extraction in 2011 was nearly 12% above the 2009 level, and record production was expected in 2012, when all storage sites would be filled to capacity. No wonder that gas companies are now planning to export LNG, and that new drilling projects have been shelved in the anticipation of gas glut.

This amazingly abrupt change of gas fortunes has been due to the rising production of shale gas. Shale gas is released by horizontal drilling followed by hydraulic fracturing of the porous rock using proprietary high-pressure mixtures of water and chemicals (the practice now widely known as fracking). Rising consumption of natural gas will eventually make it not only more important than crude oil but the single-most important fossil fuel.

Too good to last? Critics say so. They point to a substantial downward revision (roughly a two-thirds reduction) of shale gas reserves in the Marcellus formation that underlies the Appalachian states from West Virginia to New York. They claim that the industry is nothing but a variation of a Ponzi scheme, for example, Rolling Stonemagazine. They note that the gas flow from new wells declines exponentially in a matter of months. Their most often repeated argument is that fracking is a huge environmental disaster that will contaminate aquifers wherever it takes place.

Here is my advice. Do not get carried away either by bonanza claims (implying only sinking natural gas prices and seeing Marcellus as the Saudi Arabia of natural gas) or by the negativism of anti-fracking activists (recently joined by Hollywood celebrities). Low prices will slow the development of shale gas. Reserve estimates of any mineral resource are always uncertain during an early stage of development (in 2011, the U.S. Geological Survey boosted its estimate of technically recoverable Marcellus gas more than 40-fold compared with its 2002 figure), and even conservative assessments point to a combination of already available reserves and the most likely additional resources that would suffice (at the current rate of consumption) to supply America for at least the next 50 years.

As for Rolling Stone’s accusation that Chesapeake Energy is running a Ponzi scheme, that company has responded in detail. Although many questions remain about the company’s actions, even if the worst suspicions are proven they do not invalidate long-term viability of shale gas extraction. Exponential decline of gas flow from fracked wells is a well-known phenomenon, taken into account by such pioneers of shale gas development as Terry Engelder at Penn State when they made their estimates of potential recovery. And if there is any water contamination, it is a problem that has well-known technical solutions.

Global LNG trade rose roughly eightfold between 1980 and 2010, and it now accounts for 30% of the worldwide natural gas trade.

All of these have been fascinating, often controversial, and newsworthy developments, and while I would not dismiss them as altogether ephemeral, I see them largely as expected ups and downs along a long trajectory of national and global energy transitions. These transitions are slow but inexorable shifts in the amounts and proportions of different primary sources of heat, light and motion, and while they may be slowed down or accelerated (and temporarily even seemingly derailed), there is no doubt about their long-term persistence and eventual outcomes.

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By the end of the 19th century, traditional biomass fuels (wood, charcoal and straw, which together dominated energy use for millennia) were reduced to a small fraction of overall energy supply as coal became the principal fuel. The shift away from coal to hydrocarbons (crude oil and natural gas) began slowly before 1900 in the United States and Russia, and it accelerated only after the Second World War. By 1970, crude oil supplied 46% of the world’s energy and its shares were 43% in the United States and 50% in Europe. There is no mystery about what will come next: Rising consumption of natural gas will eventually make it not only more important than crude oil but the single most important fossil fuel.

Seen from this perspective, U.S. shale gas production must be viewed as only one, albeit a major, component of gas’s global rise. In 1970, natural gas supplied 18% of global commercial energy and that share rose to about 24% by 2010 (with the EU share going from less than 8% to 26%), while the worldwide crude oil share fell from 46% to 34% (and in the EU from 50% to 38%). Natural gas’s rise has been slowed recently by China’s extraordinarily high coal extraction rates, but these cannot be repeated in the future (the country is already a large importer of coal). Natural gas will thus continue its conquest of global and national energy supplies, with five factors behind the rise — discoveries of new large fields, diffusion of shale gas production, expansion of LNG exports, high prices of crude oil, and unrivalled efficiency of gas converters.

Do not get carried away either by bonanza claims or the negativism of anti-fracking activists.

New giant gas fields have been discovered in such previously unpromising places as the Mediterranean off Israel’s shores and deep Atlantic waters offshore near Brazil. There are extensive deposits of gas-bearing shales in Europe (particularly in Poland) and enormous resources in Asia. Recent reductions in the cost of gas liquefaction coupled with increased sizes of LNG tankers (they now rival the size of ships carrying crude oil) made LNG into a trade equivalent of oil: It can now be transported to consumers on any continent, bought without restrictive long-term contracts, and delivered at increasingly affordable prices. The totals speak for themselves: Global LNG trade rose roughly eightfold between 1980 and 2010, and it now accounts for 30% of the worldwide natural gas trade.

Little has to be said about high oil prices (the price spread between liquid and gaseous hydrocarbons has reached an unprecedented level), but the conversion efficiencies achievable by furnaces and turbines burning natural gas are not sufficiently appreciated. New, super-efficient household gas furnaces convert up to 97% of the fuel into heat; combined-cycle generation (using the waste heat from a gas turbine to raise steam and generate more electricity in an associated steam turbine) now produces electricity with 60% efficiency (and 70% will be possible in the future).

Modern (that is, overwhelmingly fossil-fuelled) civilization needs highly concentrated sources of energy that can be conveniently delivered to the megacities where most of humanity will soon live. No other fuel can fit this need as efficiently and with such a relatively low environmental impact as natural gas (its combustion releases less carbon dioxide per unit of useful energy than coal or oil). The conclusion is obvious: The world should speed up its unfolding transition from coal and crude oil to natural gas by using the fuel not only for heating, electricity generation, and as feedstock for industrial syntheses but also as a transportation fuel. Spending toward that goal would bring faster and more durable gains than subsidizing such dubious conversions as turning corn into ethanol or pouring huge sums into money-losing solar enterprises.

Greater Use of Natural Gas Vehicles Requires Greater Infrastructure

Thesis: There is potential ( but they used to same the same about me) for natural gas to power more transportation but that will reguire the stations to fuel the trucks fleets. Right now there are significant gaps in the service market that prevent a wider adoption of nat gas engines.

Westport Innovations* (WPT : TSX : $43.07)
Westport Innovations* (WPRT : NASDAQ : US$43.09)

Shares of Westport Innovations jumped after news broke that
General Electric (GE) and Chesapeake Energy (CHK) announced a collaboration agreement to develop infrastructure
solutions that will help accelerate the adoption of natural gas as a transportation fuel.

To formalize the agreement, GE and CHK have signed a memorandum of understanding (MOU) on a product and services development partnership, representing a multiyear collaboration between the two companies to develop and bring to market compressed natural gas (CNG) and liquefied natural gas (LNG) transportation and natural gas home-fueling solutions. As part of the collaboration agreement, beginning in
the fall of 2012, GE will provide more than 250 modular and standardized CNG compression stations for NGV infrastructure.
The news was “clearly positive as this latest example of continued commitment to natural gas by bellwether energy and infrastructure companies should help drive vehicle OEMs’ comfort and commitment with this established gasoline/diesel supplement or alternative.”

This marks the third announcement by global scale companies, who plan on building LNG/CNG refuleing infrastructure. Several months ago, Shell (RDS.A) and
Clean Energy Fuels (CLNE) announced separate plans to build refuelling infrastructure in Alberta and California.

P.S. Please feel free to forward this along to friends, family, co-workers, or anyone else you think might be interested in this market letter ( http://www.amp2012.com)

                                   RULE  No. 1 :  First Invest In Yourself

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Send  your check or money order for $ 28.75 payable to Jack A. Bass  to:

 

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