Why is Westport is scary over $20/share?
Probably the most contraversial holding in everyones portfolio is WPRT. The city of NY shows significant adoption of natural gas running units in its public services and appear committed to using them in the future but I don't know if the rest of the country will make the same jump without a legislative push. The situation with Cummins is particularly troubling. It indicates a disrespect for Westport that I am uncomfortable with for a variety of reasons:
1. It appears that they don't fear legal recourse of what is a borderline patent violation of the Westport design. The take from this could be that the patents are not as strong as the market suspects. There has been substantial time now for engineers to have studied them in order to make this assessment.
2. Competitors will study the Cummins variations and use that information to crowbar their own designs past the Westport patents weakening their advantage further. Any legal wrangling that might occur will be distracting and an impediment to the speed of Westport market penetration which is really bad news.
3. Electrical motors and hybrids are improving every year and natural gas prices will not always be $2 and those facts keep me from sleeping too comfortably on a Westport pillow. Still, the potential is huge if the governmental pen hits the paper.