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Westport Innovations: A Good Play For Those Willing To Take On A Bit Of Risk

Jun 12 2012, 10:51 by: Tactical Investor  |  about: WPRT, includes: RF, V

Investors willing to take on a bit of risk could be well rewarded with this play. Westport Innovations appears to be putting in a bottom, and the outlook appears to be improving going forward. While year over growth is projected to come in at -4.3% in 2012, it is projected to jump to 42% in 2013. 3-5 year EPS growth rate is projected at 30%, and it has a strong relative strength score of 73. If you are not willing to take on some risk, then you would be best served by looking for alternative plays.

Some reasons to be bullish Westport Innovations:

  • A strong relative strength score of 73 out of a possible 100
  • A low long-term debt to equity ratio of 0.16
  • A strong quarterly revenue growth of 132%
  • The float stands at 42 million shares and the number of shares short is 17 million. Percentage short of float is 40%
  • It has a projected 3-5 year EPS growth rate of 30%
  • Sales increased from $122 million to $265 million.
  • A very good current ratio of 4.63
  • An excellent quick and cash ratio of 4.7 and 4.4 respectively
  • Year over projected growth rate of 43% for 2013
  • $100K invested over 5 years would have grown to $237K

Company: Westport Innovations (WPRT)

Basic Key ratios

  1. Relative Strength 52 weeks = 73
  2. Cash Flow 5-year Average = -0.91

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

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 30
  2. ROE 5 Year Average = -43.53
  3. Return on Investment = -21.54
  4. Current Ratio = 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

Interesting companies

For investors looking for other ideas, detailed data has been provided on one additional company. Our latest article could also prove to be a source of some new ideas: Caterpillar: A Yield Boost Of 12% Or A Lower Entry Cost.

Company: Visa Inc-A (V)

Levered Free Cash Flow = $2.46B

Growth

  1. Net Income ($mil) 12/2011 = 3650
  2. Net Income ($mil) 12/2010 = 2966
  3. Net Income ($mil) 12/2009 = 2353
  4. EBITDA ($mil) 12/2011 = 7856
  5. EBITDA ($mil) 12/2010 = 6535
  6. EBITDA ($mil) 12/2009 = 5575
  7. Cash Flow ($/share) 12/2011 = 6.97
  8. Cash Flow ($/share) 12/2010 = 5.65
  9. Cash Flow ($/share) 12/2009 = 4.34
  10. Sales ($mil) 12/2011 = 9188
  11. Sales ($mil) 12/2010 = 8065
  12. Sales ($mil) 12/2009 = 6911
  13. Annual EPS before NRI 12/2008 = 2.25
  14. Annual EPS before NRI 12/2009 = 2.92
  15. Annual EPS before NRI 12/2010 = 3.91
  16. Annual EPS before NRI 12/2011 = 4.99

Dividend history

  1. Dividend Yield = 0.8
  2. Dividend 3 year Growth =30%

Dividend sustainability

  1. Payout Ratio 06/2011 = 0.17
  2. Payout Ratio 5 Year Average 06/2011 = 0.15

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 16.43
  2. ROE 5 Year Average = 11.12
  3. Current Ratio = 2.90
  4. Quick Ratio = 1.10
  5. Cash Ratio = 2.38
  6. Interest Coverage = 150

Company: Regions Financial Cp (RF)

Growth

  1. Net Income ($mil) 12/2011 = -429
  2. Net Income ($mil) 12/2010 = -763
  3. Net Income ($mil) 12/2009 = -1261
  4. EBITDA ($mil) 12/2011 = 1959
  5. EBITDA ($mil) 12/2010 = 381
  6. EBITDA ($mil) 12/2009 = -34
  7. Cash Flow ($/share) 12/2011 = 1.47
  8. Cash Flow ($/share) 12/2010 = 0.31
  9. Cash Flow ($/share) 12/2009 = -0.42
  10. Sales ($mil) 12/2011 = 6395
  11. Sales ($mil) 12/2010 = 8220
  12. Sales ($mil) 12/2009 = 9087
  13. Annual EPS before NRI 12/2007 = 1.96
  14. Annual EPS before NRI 12/2008 = 0.74
  15. Annual EPS before NRI 12/2009 = -1.27
  16. Annual EPS before NRI 12/2010 = -0.46
  17. Annual EPS before NRI 12/2011 = 0.17

Dividend history

  1. Dividend Yield = 0.7
  2. Dividend Yield 5 Year Average = 2.7
  3. Dividend 5 year Growth = -61.71
  4. Payout Ratio = 0.11
  5. Payout Ratio 5 Year Average = 0.58

Performance

  1. Next 3-5 Year Estimate EPS Growth rate = 7
  2. 5 Year History EPS Growth = -42.27
  3. ROE 5 Year Average = 1.07
  4. Current Ratio = 0.84
  5. Current Ratio 5 Year Average = 0.95
  6. Quick Ratio = 0.85
  7. Interest Coverage = 1.50

Conclusion

As this play is rather volatile, and the markets are still attempting to put in a bottom, investors should consider waiting for a test of the 24.50-25.00 range before deploying money into this play. One way to reduce your entry cost would be to sell puts at strikes where you would not mind owning the stock.

Sources: 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. Earnings and growth estimates sourced from dailyfinance.com.

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.

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