I’ve written a few times about Westport Innovations (WPT in Toronto, WPRT on the Nasdaq) in the past, and I own shares at a price about 20-25% below where they’re currently trading. But I’ve been reluctant to call extra attention to them, or to single them out as a good investing idea, because of the huge runup they had this spring, and because of the ongoing uncertainty regarding their biggest new line of business.

Now, a little bit of that uncertainty has been worked off, and the price has come down significantly. That tells me that this is an intriguing investment for those who are risk tolerant, patient, and interested in alternative energy.

Who are they?

At the most basic level, Westport Innovations is a Canadian company that focuses on building and modifying engines so that they can burn alternative fuels like propane, natural gas, or hydrogen. In practical terms, this is a company that has been an unprofitable R&D shop for many years, and that currently has one major, profitable product line: they sell, through their joint venture with Cummins, a midsize natural gas truck engine that is used by local fleet operators of vehicles like city buses, garbage trucks, and the like.

Cummins Westport — the only profit center, so far.

The JV is called Cummins Westport (CWI), and is 50/50 shared by the two companies, though Cummins is really the operator of the business. Westport brings the natural gas tank and injection technology and relevant electronic controls and emissions equipment, Cummins pretty much brings the rest of the engine and their huge distribution network and relationships with large customers (Cummins, if you’re unfamiliar, is one of the largest diesel engine manufacturers in the world).

This business produces engines that use both compressed natural gas (CNG) and liquefied natural gas (LNG). CNG is the same thing that is generally used for regular passenger vehicles that are powered by natural gas — there are quite a few of these worldwide, though the last big push for natural gas for individual vehicles in the U.S. was decades ago (Honda still sells a natural gas Civic, they’re making about 1,500 of them for the US this year, but other than that these cars are kit conversions or the remaining stock of past efforts by auto manufacturers). There has been a lot of chatter about GM ...