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Westport (WPRT) Up 98.5% YTD: What's Working in Favor?
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Westport Fuel Systems Inc. (WPRT - Free Report) has had an impressive run on the bourses, both in absolute and relative terms. Shares of the advanced alternative fuel systems’ manufacturer have gained 98.5% on a year-to-date basis, handily outperforming the industry’s growth of 26.4%.
Let’s delve deeper into the factors behind the uptick in stock price.
With rising demand for environmentally-friendly vehicles, original equipment manufacturers (OEMs) are expanding their alternative fuel vehicle offerings. With this, Westport has a suite of market-ready alternative fuel products across all segments of transportation.
The firm continues to benefit from stricter emission regulations and is cashing in on this with a portfolio of offerings that will help automakers meet the requirements, without having to allocate significant capex. Westport’s offerings provide 20% reduction in CO2, exceeding the 2025 target of 15%. With the adoption of low-carbon renewable natural gas that can seamlessly work with HPDI 2.0 technology, the company is expected to gain market traction.
Along with launches and collaborations, Westport invests in technologies which are likely to boost its prospects. Westport’s HPDI 2.0 technology enhances the performance of heavy-duty trucks without harming the environment. The product has been launched in Europe and China, in partnership with China’s Weichai. Per the production agreement with Weichai, Westport will develop and commercialize natural gas engine based on one of Weichai Power’s heavy-duty engine platforms. This will enable it to increase market share in China’s heavy-duty truck market. The company’s 50:50 joint venture with Cummins (CMI - Free Report) also aids in product development in the North American market, boosting its top line.
Westport’s divestments deal to streamline its portfolio and use the proceeds to tap onto more profitable business is appreciated. In July 2018, the company sold the Italy-based compressed natural gas compressor unit to Snam S.p.A. for $14.7 million. In 2017, it divested assets of Industrial and Auxiliary Power segment for $87.5 million and $70 million, respectively. These divestments are in line with the company’s focus on the transportation sector.
Upbeat 2019 Guidance
For 2019, the company projects consolidated revenues from continuing operations of $295-$305 million, up from the previously mentioned $285-$305 million.
Westport carries a Zacks Rank #2 (Buy) and has witnessed an upward revision in 2019 earnings estimates of 3 cents over the past 30 days. Investors can consider a few other favorably-ranked players in the Auto-Tires-Trucks sector like Spartan Motors, Inc. and BRP Inc. (DOOO - Free Report) , both carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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Westport (WPRT) Up 98.5% YTD: What's Working in Favor?
Westport Fuel Systems Inc. (WPRT - Free Report) has had an impressive run on the bourses, both in absolute and relative terms. Shares of the advanced alternative fuel systems’ manufacturer have gained 98.5% on a year-to-date basis, handily outperforming the industry’s growth of 26.4%.
Let’s delve deeper into the factors behind the uptick in stock price.
With rising demand for environmentally-friendly vehicles, original equipment manufacturers (OEMs) are expanding their alternative fuel vehicle offerings. With this, Westport has a suite of market-ready alternative fuel products across all segments of transportation.
The firm continues to benefit from stricter emission regulations and is cashing in on this with a portfolio of offerings that will help automakers meet the requirements, without having to allocate significant capex. Westport’s offerings provide 20% reduction in CO2, exceeding the 2025 target of 15%. With the adoption of low-carbon renewable natural gas that can seamlessly work with HPDI 2.0 technology, the company is expected to gain market traction.
Along with launches and collaborations, Westport invests in technologies which are likely to boost its prospects. Westport’s HPDI 2.0 technology enhances the performance of heavy-duty trucks without harming the environment. The product has been launched in Europe and China, in partnership with China’s Weichai. Per the production agreement with Weichai, Westport will develop and commercialize natural gas engine based on one of Weichai Power’s heavy-duty engine platforms. This will enable it to increase market share in China’s heavy-duty truck market. The company’s 50:50 joint venture with Cummins (CMI - Free Report) also aids in product development in the North American market, boosting its top line.
Westport’s divestments deal to streamline its portfolio and use the proceeds to tap onto more profitable business is appreciated. In July 2018, the company sold the Italy-based compressed natural gas compressor unit to Snam S.p.A. for $14.7 million. In 2017, it divested assets of Industrial and Auxiliary Power segment for $87.5 million and $70 million, respectively. These divestments are in line with the company’s focus on the transportation sector.
Upbeat 2019 Guidance
For 2019, the company projects consolidated revenues from continuing operations of $295-$305 million, up from the previously mentioned $285-$305 million.
Westport carries a Zacks Rank #2 (Buy) and has witnessed an upward revision in 2019 earnings estimates of 3 cents over the past 30 days. Investors can consider a few other favorably-ranked players in the Auto-Tires-Trucks sector like Spartan Motors, Inc. and BRP Inc. (DOOO - Free Report) , both carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>