Thursday, January 19, 2012

As Natural Gas Collapses Who Benefits? (Soros) WPRT; CLNE; UNG

Back in June 2011 we posted "Why Does George Soros Keep Buying Westport Innovations? (WPRT; CLNE; UNG)". The stock closed at $21.10 that day.

Here's what the stock has done (via Yahoo Finance):
Chart forWestport Innovations Inc. (WPRT)

At $34.20, off 97 cents on the day, it seems kinda pricey but I've got to think that a natural gas engine maker has some potential. Apparently Mr. Soros does too, he's the company's largest shareholder, almost all of it acquired through open market purchases.
They are cutting deals with Ford and Shell that could turn a story stock (still showing losses) into an actual business. They're at ~$250 mil. in revs.

Throw in Cummins, Caterpillar and GM and there is some potential.

NatGas is down another 5% today at $2.342. it might see $2.00 before the drillers come to their senses.

As of the Aug. 15 13F Soros Fund Management had a $120Mil. stake in WPRT. We should get one more filing before SFM returns all the outside money and stops filing.

From the Globe and Mail Jan. 16:
Overpriced or a great growth stock? Westport fuels both opinions 
Depending on whom you pay attention to, Vancouver’s Westport Innovations Inc. (WPT-T34.55-0.92-2.59%) is a fabulous growth stock with a non-stop upward trajectory, or a vastly overpriced investment with profits still several years down the road.

The company, which makes technology that allows truck and bus engines to run on natural gas, has seen a remarkable runup in its share price. It has almost doubled in the last year, and is about six times the price it traded at three years ago.

Westport is essentially a play on low natural gas prices. With the spread between conventional fuels and gas, there is a strong business case for companies to shift their trucking fleets to run on the cheaper fuel. There are also environmental advantages, as natural gas emits fewer emissions than conventional fuels.
Westport generates substantial revenue – $164-million (U.S.) in the first nine months of 2011, up 56 per cent from the year earlier period, but it still loses money.

That has some analysts concerned about its valuation, while others say that it is only a matter of time before the company is a big profit spinner.

There is also a national divide between the two camps. Most Canadian analysts are cautious about Westport’s prospects, while U.S. analysts tend to be much more bullish on the firm....MORE 
See also:
And Now for Something Completely Different: Natural Gas Engine Maker "We Don't Need $100 Oil or U.S. Help" (WPRT)