Send me real-time posts from this site at my email
Motley Fool

Why Westport Fuel Systems Stock Just Popped 28%

What happened

Shares of Westport Fuel Systems (NASDAQ: WPRT) exploded out of the gate Friday and are up 27.8% as of 10 a.m. EDT. The natural gas-fueled engine maker announced that its Weichai Westport Inc. joint venture in China has secured certification for its 12-liter "HPDI 2.0" engine from the Ministry of Ecology and Environment of China.

So what

According to Westport, this certification puts Westport in a position "to market and sell the heavy-duty natural gas engines with HPDI technology to various truck original equipment manufacturers" in the Middle Kingdom. Certification was held up initially because of "delays introduced by COVID-19," confided Westport CEO David Johnson, but now that it's in hand, the company can begin supplying "critical HPDI 2.0 components to" Weichei Westport, which will produce WP12HPDI engines equipped with the technology.

Image source: Getty Images.

Now what

This sounds like good news, but it's not immediately apparent how good. Westport didn't say, for example, how much it expects to take in in revenue from HDPI 2.0 sales to support the new engine. Data from S&P Global Market Intelligence, meanwhile, suggest that Westport currently has only minimal assets in China proper, and sales to the Asia/Pacific region, in general, make up less than 8% of Westport's annual business.

Regardless, investors seem pleased and they're buying Westport shares hand over fist on the news.

10 stocks we like better than Westport Fuel Systems Inc.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Westport Fuel Systems Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of August 1, 2020

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


Source

Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue