I'm been out of the country for the past month or so, hanging out in Jakarta and now, Penang, Malaysia.. So while I have been limited in my active trading, my investment in WPRT has worked out very nicely by just being a "buy and hold" position..
I've been surprised by the strength the stock has shown in recent weeks.. I knew it was due for a bounce, but this appears to be a sustained rally that may have months left to go (with the requisite volatility).. but the trend clearly appears to be upward towards $5-6/share.. and maybe more.. The book value of the company is current at $3.30 (per yahoo) and may be upgraded with recent non-core asset sales.
That has me thinking more and more about the catalyst for such a move.. We know, based upon company reports, that their HPDI 2.0 injectors are ready for "prime time" now.. And this certainly holds the promise of a relatively inexpensive "fix" for converting existing Diesel vehicles to LNG (CNG with additional modification), as well as selling completely new engines that are low..
But there is also the political angle that I believe may be playing a role here..
When Trump pulled out of the Paris Climate Change accord, and I believe rightfully so because it was detrimental to US economic growth and too easy for other less "credible" gov'ts to cheat when it came to reporting their emissions reductions, we all saw how he was criticized for that.
But Trump still wants to claim he's an environmentalist, while at the same time, promoting US jobs and energy independence. And I'm increasingly coming to believe that he may actually start promoting NG solutions to reducing emissions in the truck fleet.. This would also dovetail with what appears to be the economic advantage of NG over Diesel, as NG costs less (and yes, we know NG is less energy dense than Diesel)..
So.. COULD Trump attempt to reclaim his environmental credentials by promoting NG, something Obama really never did?
The other side of this equation is that those "never Trumper" states (California, and the Northeastern states) who want to thumb their nose at Trump, may also feel greater urgency to move their NG conversion programs forward independent of Trump's withdrawal from the Paris accord.
There is also the strategic side of this, which I've long held lurks in the background. WERE their to be a war in the Mid-East, or anywhere else, that requires massive US response, Oil, and it's processed products would immediately become a strategic material.. It might be merely for the purpose of the US making up for lost production on a global basis, or dedicating refined products to the war effort.. (jet fuel, JP8 fuel.. etc)..
In such a situation, NG would be a natural alternative, as it is relatively land-locked within the US...
These are just a few thoughts, but I'm intrigued by the potential for Trump voicing his support for NG.. IMO, it would be a no-brainer which could not be reasonably criticized by the Democrats. And it would promote jobs within the drilling community..
I welcome other thoughts from anyone still following this thread..
BTW, those not familiar with HPDI 2.0 should read this page.. I believe it could truly be a game-changer for the trucking industry.. Retrofitting existing Diesel engines to operated on a LNG/Diesel mix, where 90% of the diesel is replaced.. It has huge implications, IMO..
westport.com
Hawk |
