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.