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Goldman Sachs does not share the positive investor reaction to Westport Innovations' (WPRT...

Goldman Sachs does not share the positive investor reaction to Westport Innovations' (WPRT +2.5%) Q4 results, reiterating its Sell rating as profitability is limited by high distribution support requirements and the Cummins JV that accounts for nearly all WPRT's medium-term profits and cash flow is scheduled to end in 2021 with a buy-out option at 1.3x EBIT in 2019.
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Comments (6)
  • savvy-investor
    , contributor
    Comment (1) | Send Message
     
    Goldman Sachse is shorting WPRT and getting hammered every time the stock moves higher. Goldman is a "crap" firm. For Goldman Sachse to put out such a retarded report looking out and guessing 6 years tells you one thing, Goldman Sachs analysts suck and the Goldman is again, a fraudulent company. Keep buying WPRT so Goldman Sachs goes bankrupt covering its short position.
    8 Mar 2013, 04:05 PM Reply Like
  • rrenz
    , contributor
    Comments (3) | Send Message
     
    I personally don't care what WPRT and Cummins are doing in 2019. We all might be melted together from nuclear fallout by then. What I do care about is the profit to be made off of the soon-to-be explosive growth in the natural gas market. Although it might end up being more prevalent in our country due to our attitude regarding foreign oil dependency and our abundant supply, this is a shift worldwide. We have enough supply to sustain our country for 100 plus years.

     

    WPRT is poised as the front-runner for all nat gas moving forward. For those that listened to the conference call and saw the reports, I see how it would be easy to get mixed signals on the future profits of the company. There is substantial value though. Just one market they are touching is the class 8 tractor market. They mentioned a conservative estimate that 7-15% of the OTR trucks will be nat gas before 2017. I believe 15% or higher is very realistic. This market is bigger than most give it credit for. If you are wearing a shirt, driving a car, or eating your lunch it all came on a truck. Virtually everything comes on a truck.

     

    In the call it is mentioned that WPRT is shifting directions from concept to production. This is what we all have been waiting for. Great ideas and now its time to make money. What they neglected to mention is that the Cummins Westport ISX 12g nat gas engine is currently available in a 350hp package. With 400hp package available as soon as June. There are standing orders for these engines even though the fuel infrastructure is not complete. They will not produce enough engines in 2013 to even scratch the surface of demand.

     

    Clearly for most businesses these are not the most profitable times so it would make sense to question why they would spend additional money on new equipment. When ROI comes into play on ground level for a freight company here is a very simple way to understand why they will leverage assets to get this product. Beside the obvious unpredictable fixed costs of the present, a company that runs 100,000 miles a year on their equipment will have a payback of additional cost in about 14 months from fuel savings. Considering average life cycle of 5-6 yrs, if they run their trucks for another 4 years the will save on average $35,000 a year in fuel cost. Thats $140,000 fuel savings in just over five years, on one truck!!! Try 50 or 100.

     

    This new nat gas tech also allows trucks to run with no exhaust aftertreatment at all! This aftertreatment system is a expensive nightmare for many fleet companies. It is a requirement to meet air quality standards for diesel trucks, but not on a nat gas truck because they burn so much cleaner. Also they only produce the noise of a passenger car while running!

     

    Being that this only represents part of their business I still believe this is a good play long, but as mentioned maybe not too long.

     

    8 Mar 2013, 04:06 PM Reply Like
  • catamount
    , contributor
    Comments (374) | Send Message
     
    I really like your first paragraph; funny and seemingly spot-on. The rest of what you wrote seems like PR piece written by an employee of the company.

     

    I'm actually a believer in the (WPRT) technology, the vision of (http://bit.ly/HI97wd), and I think (http://bit.ly/z7ua4O) is a great company. Though, aside from (http://bit.ly/z7ua4O) I just couldn't make a long-term investment in any of them.

     

    F.Y.I. Having such strong opinions with comment-counts below 100 (I know it's a low barrier, but having some barrier helps) is just somewhat suspicious (not to get all conspiracy theory on ya...).
    9 Mar 2013, 07:43 PM Reply Like
  • arthursrt
    , contributor
    Comments (25) | Send Message
     
    I called the Company 4 months ago. I inquired then whether or not they had a conversion kit for passenger car Diesels. The gal I talked with was to send me info. I drive a Volkswagen Passat SW, powered by TDI. Turbo Diesel Injection). It is a total no-brainer for a company who has it's wits about them to have info to convert a TDI. But I haven't got anything in the mail or been contacted back by any technician
    8 Mar 2013, 05:13 PM Reply Like
  • Jake37
    , contributor
    Comments (25) | Send Message
     
    Is Goldman ignoring the Weichei JV?
    9 Mar 2013, 01:54 PM Reply Like
  • jfenning
    , contributor
    Comment (1) | Send Message
     
    I'm co-author of the book How America Can Stop Importing Foreign Oil & Those Preventing It From Happening. I don't give investment advice and I'm a shareholder in Westport. so much for disclosures. There are only two fuels powerful enough to drive a heavy duty truck at freeway speeds and over mountains - diesel and natural gas. The transition to natural gas is a necessity in order for America to become energy independent and not support regimes that want to harm us. The current manufacturing process for natural gas engines is similar to a craft industry with low numbers of about 500 a month for North American market. The engine prices should drop given more volume. Read the full investigative report e-book on Barnes and Noble or Amazon. Good luck with your investments. natural gas is a vital part of a future for the United States.
    11 Mar 2013, 05:47 AM Reply Like
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