Westport Says “Next Year!” … AGAIN

By Travis Johnson, Stock Gumshoe, October 1, 2014

Westport Innovations (WPRT) was a great story five years ago with great potential, and it remains a compelling “story stock” that continues to appeal to storytelling newsletter writers and suck in investors today — that’s why we’ve had it on the watchlist for many years, since it was one of our “Idea of the Month” picks back in 2008.

A couple years ago I gave up and said WPRT was no longer buyable as a great story stock, it’s now a “show me” stock… we can’t use projected revenues or new products or advances in technology or natural gas prices or rollout of nat gas fueling stations or deals with manufacturers anymore in our valuation of the company, they have to have actual growing revenue and real potential profit.

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The company has been extremely consistent at one thing — they always say, and have said for five+ years in a row, that they are 12-18 months away from becoming profitable or cash-flow positive or EBITDA positive. They said that again last night, but more dramatically cutting their projected revenue again and saying that they now will be reporting positive EBITDA by the end of 2015.

The stock fell 25%. And that’s after being cut in half in the previous 12 months. I guess other investors are giving up, too, as we all should have done several years ago. You can only cry wolf so many times (or say, “actually, it’s going to take us one more year to make money”) before people stop running in to help.

I’m keeping it on the watchlist, because next time oil prices go up and gas prices stay low we’re almost certainly going to see it teased again — it’s a great story with great logic behind it’s primary products (HPDI direct injectors that can create “diesel-like” performance from natural gas fueled truck engines, plus cryogenic fuel tanks and pumps), but it’s a really, really lousy investment. Even at $8.

Now, if it gets back down to $5 again… well, we’ll talk.

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