This Fast-Growing Company Could Kill the Gasoline Engine

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Every now and then, I run across a statistic or a fact that makes me feel really stupid. I kick myself: "Why didn't I already know that?"

What got me is that myred Dodge Ram 1500 is technically classified as a "light truck." I was mortally offended. My pickup has a 5.7-liter HEMI V-8 and is as loud as the Space Shuttle and almost as fuel efficient. It doesn't feel like a light truck. 

But it is. 

The thing that matters more than light trucks, though, are the larger semi trucks that roll down the highway. There are millions of them. They drive a huge amount of miles, and they get about five miles to the gallon. These rigs burn through billions of gallons of diesel a year. 

Imagine if we could replace diesel with something else... that fuel would be a serious Game-Changer. 

If that fuel were cleaner than gasoline and diesel, then transportation emissions would drastically decrease. And if this new fuel were cheaper, the diesel dominos would begin to fall. Quickly. 

Now, hold on to your hats. Because the reality is, all of those various kinds of light and heavy trucks -- and cars, too -- can get the same energy out of a fuel that costs about half what diesel sells for. 

Let me explain...

Natural gas is abundant, clean and, unlike oil, can be domestically sourced. In fact, there's an entire ocean of natural gas in this country waiting to get tapped. 

As most of you already know, natural gas production is on the rise because of an increase in oil production in the nation's massive shale formations. 

What you may not know is that natural gas has the ability to displace billions of gallons of diesel, not only on the road, but for heavy equipment like cranes and bulldozers and even tractors and combines on the farm.

That's all around the corner. And I've found astock that is the strongest pure play on this trend.

That stock is Westport Innovations (Nasdaq: WPRT ) .

This is an area that has several key tailwinds behind it: environmental, governmental, industry support -- such that  I think natural gas vehicles are the inevitable future. 

Westport makes natural gas engines that are cost-competitive with diesel engines and have 80% of the parts in common.

Vancouver-based Westport has amarket cap of $1.5 billion, which is right in the sweetspot for the types of companies I like to recommend in Game-Changing Stocks , my bi-monthly stock advisory, which focuses on aggressive growth. 

It's growing its top line, and not by a little. The orders for these vehicles are clearly fueling remarkable growth: In the past 12 months, it's booked $371.48 million, according to Bloomberg, a 64% increase from the $226.5 million recorded in fiscal 2011. (And that figure was $100 million more than the year before, in 2010.) 

That's the type of growth Westport is seeing now. 

Today, as we speak, there aren't all that many of these cars on the road in this country. So imagine what thatrevenue is going to do when consumers learn they can drive a car on fuel that costs drastically less than gas -- or when truckers start buying big rigs that burn clean fuel that lets them sidestep ever-increasing diesel emissions rules. 

Action to Take --> A number of factors have converged to form what looks alot like the perfect storm for natural gas to become a substantial fuel source. Supply and pricing dynamics, industry support, continuing infrastructure development, strong political support and international opportunity -- it's all there. There's simply too much to say on these points to fit into one article. 

But let me be clear: None of this is theoretical. None of it is on a chalkboard. 

It's here. It's happening.

The trucking industry wants to use natural gas, the truck-stop operators are willing to sell it, and Corporate America is only too glad to embrace the significant cost cuts natural gaswill afford. 

Natural gas also clearly has White House and Congressional support, and it is gaining serious traction abroad, especially in China. Aprime candidate to invest in the space is clearly the pure play, Westport.

[Note: Westport is just the tip of the iceberg... The abundance of natural gas in the United States will lead to the third industrial revolution . One analyst is predicting a stock could rise $1,566%. Another stock has already jumped more than 1,000% and is expected to keep going. To learn more aboutinvesting in the natural gas boom, click here . ]


--Andy Obermueller

Andy Obermueller does not personally hold positions in any securities mentioned in this article. StreetAuthority LLC does not hold positions in any securities mentioned in this article.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

© Copyright 2001-2010 StreetAuthority, LLC. All Rights Reserved.


This article appears in: Investing , Commodities

Referenced Stocks: WPRT

Andy Obermueller

Andy Obermueller

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