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A 21st Century Transportation Stock

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Every few decades or so, industries begin to swap one technology for another. While it doesn't happen overnight, by the time the shift is over, obscure companies have become industry kingpins.

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But clearly, the big opportunity is in the large truck market, since the potential savings are so great. In February at a large trade show, every truck manufacturer in North America was offering a natural gas option-and 100% of those available trucks included some Westport content.

The company has operations worldwide, including Vancouver, California, Detroit, France, Sweden, Italy, China, and Australia. Early this year, Westport announced a partnership with a large Chinese engine manufacturer to supply engines for major transportation companies in that rapidly growing market.

China also possesses large natural gas reserves and so the government there is enthusiastic about supporting the transition to natural gas powered vehicles. The company Westport partnered with, Weichai Power, holds 40% of the heavy-duty truck engine market in China, and sold over 200,000 engines last year, so the upside should be very strong.

It's possible that with all of Westport's intellectual property and numerous patents, it could become a takeover target at some point. This is not necessarily a reason to buy the stock, but it's nice to have out there as a possibility.

Financial Highlights
On August 2, the company reported strong second-quarter results, with revenue up 136% year-over-year. Gross margin percentages were also higher at 38.2%, compared to 33.9% in the prior year period.

No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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