Big Cummins Westport Order

By Travis Johnson, Stock Gumshoe, October 15, 2008

Westport announced that they’ve gotten a huge order for buses that use the Cummins Westport natural gas engine — over 3,000 buses, which will give a nice bump to CWI revenue, some of which will trickle through to Westport.

In truth, however, the real story of growth for Westport remains the California ports — the partnership with PACCAR is still going nicely, with Peterbilt now officially offering Westport engines as it joins its partner Kenworth in this venture. This is the large risk in these shares — when I looked at Westport a couple months back it was with confidence that the funding for the truck replacement program in LA and Long Beach would be very robust. I’m less confident in that now, since the Governor vetoed at least one of their sources of funding and the California economy is not generally all that healthy at the moment.

I’m glad to see the shares coming up a bit, but if you hold these shares and are at all worried about short term performance I’d still be looking to sell into strength, or, if you believe that the stock has a good chance of advancing, setting trailing stops. There are too many other profitable and successful companies that don’t have this kind of risk hanging over their heads (including perhaps their big partners, Cummins and PACCAR). I keep writing about Westport, so I haven’t been able to sell my shares (I may not have anyway, I tend to be too stubborn to sell much of the time) — I continue to hold.

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