Westport Innovations Among 1 Of 4 Interesting Speculative Plays

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 |  Includes: JRCCQ, NBR, TSL, WPRT
by: Tactical Investor

These stocks are speculative in nature and only investors who are open to taking on some risk should consider them. History illustrates that even the worst of stocks can mount pretty strong rallies. These rallies usually do not last, but they can be strong enough to produce some rather handsome returns. Investors, who are risk averse, should look for alternative plays such as those discussed in this article Showdown: General Electric Vs. Honeywell

The following factors should be viewed as small positive developments if present in any of the suggested plays.

  • The rate at which net income is dropping is slowing down.
  • The rate at which cash flow per share is dropping is slowing down.
  • Sales for the past three years are trending upwards.
  • Projected 3-5 year EPS growth is in 10%-15% ranges.
  • A current ratio above 2.5 0
  • A quick ratio of 2.00

Bonus factors

  • Volume spike on an up day - this is usually a sign of accumulation and maybe close to putting in a bottom.
  • Insider buying - it is always a good sign of a turnaround, especially if the stock is beaten down.
  • Book value - trading below book value is another small positive sign as it at least indicates you are not over paying for the stock.

Company: Westport Innovations (NASDAQ:WPRT)

Basic Key ratios

  1. Relative Strength 52 weeks = 73
  2. Cash Flow 5-year Average = -0.91
  3. Dividend Yield 5-Year Average = 0

Growth

  1. Net Income ($mil) 12/2011 = -60
  2. Net Income ($mil) 12/2010 = -12
  3. Net Income ($mil) 12/2009 = -7
  4. EBITDA ($mil) 12/2010 = -6
  5. EBITDA ($mil) 12/2009 = 1
  6. Cash Flow ($/share) 12/2010 = -0.85
  7. Cash Flow ($/share) 12/2009 = -0.88
  8. Sales ($mil) 12/2011 = 265
  9. Sales ($mil) 12/2010 = 148
  10. Sales ($mil) 12/2009 = 122
  11. Annual EPS before NRI 12/2007 = -0.11
  12. Annual EPS before NRI 12/2008 = -1.11
  13. Annual EPS before NRI 12/2009 = -1.02
  14. Annual EPS before NRI 12/2010 = -1
  15. Annual EPS before NRI 12/2011 = -1.24

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Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 30
  2. ROE 5 Year Average 12/2011 = -43.53
  3. Return on Investment 12/2011 = -21.54
  4. Current Ratio 12/2011 = 4.63
  5. Current Ratio 5 Year Average = 4.28
  6. Quick Ratio = 4.73
  7. Cash Ratio = 4.42
  8. Interest Coverage Quarterly = N/A
  9. Book Value Quarterly = 7.76

Notes

Percentage short of float is 40% and it sports a strong quarterly revenue growth rate of 132%. It also has a projected 3-5 year EPS growth rate of 30%

Company: Trina Solar Ltd (NYSE:TSL)

Growth

  1. Net Income ($mil) 12/2011 = -38
  2. Net Income ($mil) 12/2010 = 311
  3. Net Income ($mil) 12/2009 = 98
  4. Net Income Reported Quarterly ($mil) = -66
  5. EBITDA ($mil) 12/2011 = 74
  6. EBITDA ($mil) 12/2010 = 446
  7. EBITDA ($mil) 12/2009 = 185
  8. Cash Flow ($/share) 12/2011 = 0.4
  9. Cash Flow ($/share) 12/2010 = 5.32
  10. Cash Flow ($/share) 12/2009 = 1.97
  11. Sales ($mil) 12/2011 = 2048
  12. Sales ($mil) 12/2010 = 1858
  13. Sales ($mil) 12/2009 = 845
  14. Annual EPS before NRI 12/2007 = 0.73
  15. Annual EPS before NRI 12/2008 = 1.19
  16. Annual EPS before NRI 12/2009 = 1.68
  17. Annual EPS before NRI 12/2010 = 4.18
  18. Annual EPS before NRI 12/2011 = -0.54

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Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 40.52
  2. ROE 5 Year Average 12/2011 = 16.86
  3. ROE 5 Year Average 06/2011 = 16.86
  4. Debt/Total Cap 5 Year Average 12/2011 = 22.2
  5. Current Ratio 06/2011 = 1.76
  6. Current Ratio 5 Year Average = 1.88
  7. Quick Ratio = 1.51
  8. Cash Ratio = 1.05
  9. Interest Coverage Quarterly = N/A

Notes

Short percentage of float is 22%. It has a projected 3-5 year EPS growth rate of 40%. It is trading roughly $9.60 below book value.

Company: Nabors Industries (NYSE:NBR)

Basic overview

  1. Quarterly revenue growth rate = 37.6%
  2. Quarterly earnings growth rate = 61%
  3. Profit margin = 4%
  4. Operating margin = 15%
  5. Beta = 2.3

Growth

  1. Net Income ($mil) 12/2011 = 244
  2. Net Income ($mil) 12/2010 = 95
  3. Net Income ($mil) 12/2009 = -86
  4. Net Income Reported Quarterlies ($mil) = 134
  5. EBITDA ($mil) 12/2011 = 1750
  6. EBITDA ($mil) 12/2010 = 1437
  7. EBITDA ($mil) 12/2009 = 1109
  8. Cash Flow ($/share) 12/2011 = 5.13
  9. Cash Flow ($/share) 12/2010 = 4.1
  10. Cash Flow ($/share) 12/2009 = 4.04
  11. Sales ($mil) 12/2011 = 6137
  12. Sales ($mil) 12/2010 = 4216
  13. Sales ($mil) 12/2009 = 3503
  14. Annual EPS before NRI 12/2007 = 3.05
  15. Annual EPS before NRI 12/2008 = 3.14
  16. Annual EPS before NRI 12/2009 = 1.29
  17. Annual EPS before NRI 12/2010 = 1.03
  18. Annual EPS before NRI 12/2011 = 1.61

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Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 27.55
  2. 5 Year History EPS Growth 12/2011 = -23.9
  3. ROE 5 Year Average 12/2011 = 12.69
  4. Return on Investment 06/2011 = 4.55
  5. Current Ratio 12/2011 = 1.98
  6. Current Ratio 5 Year Average = 2.04
  7. Quick Ratio = 1.56
  8. Interest Coverage Quarterly = 4.39

Notes

It appears to be the strongest out of the lot. Net income, EBITDA and cash flow per share have been increasing for the past 3 years. It sports a decent interest coverage ratio of 4.3 and a good 3-5 year estimated EPS growth rate of 27.5%. It is also trading roughly $7 below book value.

Company: James River Coal Co. (JRCC)

Basic overview

  1. Percentage held by Institutions = 70.8%
  2. Levered free cash flow of = - $51.6 million
  3. Operating margin = 1.94%
  4. Quarterly revenue growth rate = 83%
  5. Beta = 3.06

Growth

  1. Net Income ($mil) 12/2011 = -39
  2. Net Income ($mil) 12/2010 = 78
  3. Net Income ($mil) 12/2009 = 51
  4. EBITDA ($mil) 12/2011 = 154
  5. EBITDA ($mil) 12/2010 = 160
  6. EBITDA ($mil) 12/2009 = 137
  7. Net Income Reported Quarterly ($mil) = -16
  8. Cash Flow ($/share) 12/2011 = 3.42
  9. Cash Flow ($/share) 12/2010 = 5.54
  10. Cash Flow ($/share) 12/2009 = 4.29
  11. Sales ($mil) 12/2011 = 1178
  12. Sales ($mil) 12/2010 = 701
  13. Sales ($mil) 12/2009 = 682
  14. Annual EPS before NRI 12/2007 = -3.66
  15. Annual EPS before NRI 12/2008 = -3.92
  16. Annual EPS before NRI 12/2009 = 1.85
  17. Annual EPS before NRI 12/2010 = 2.82
  18. Annual EPS before NRI 12/2011 = -0.19

Click to enlarge

Performance

  1. ROE 5 Year Average 12/2011 = -23.15
  2. Current Ratio 12/2011 = 2.64
  3. Current Ratio 5 Year Average = 2.08
  4. Quick Ratio = 1.92
  5. Cash Ratio = 1.29
  6. Interest Coverage Quarterly = 0.66
  7. Book Value Quarterly = 11.05
  8. Price/ Book = 0.37
  9. Price/ Cash Flow = 1.15
  10. Price/ Sales = 0.11
  11. EV/EBITDA 12 Mo = 3.62

Notes

It is trading almost $9 below book value. Short percentage of float stands at a whopping 50%. It sports a quarterly revenue growth rate of 83%

Conclusion

These are not stocks one should consider holding for the long run, unless the fundamentals and or the technical picture changes considerably. In general though, when one is dealing with such stocks the best option is to bank the profits if they happen to take off. Investors who are not interested in these plays might find this article to be of interest A Dozen Reasons To Like American Capital Agency Corp.

Disclaimer

This list of stocks is meant to serve as a starting point. Please do not treat this as a buying list. It is imperative that you do your due diligence and then determine if any of the above plays meet with your risk tolerance levels. The Latin maxim caveat emptor applies-let the buyer beware

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: EPS and Price Vs industry charts obtained from zacks.com. A major portion of the historical data used in this article was obtained from zacks.com.