AUG 23 & 24 OPTIONS VERY ACTIVE TODAY ( both calls & puts). In fact it looks as if block size in calls and puts traded at the same time. This may indicate that someone is putting on a synthetic trade because the stock is getting hard to borrow or may be getting expensive to borrow. 1100 of the 23 contracts traded and another 4700 24 strike options (nearly 600000 share equivalents.).
Long and holding
WHERE DOES THE 97% NUMBER COME FROM?
PROBABLY the same 97% scientist that told us to dump butter and use margarine 50 years ago. Today, half of the country has cholesterol problems the SCIENTIST say never mind.
Take advantage of others ignorance of the revenue line. and buy the stock. Once JVs become profitable, the revenue will drop to the bottom line. This stock is a no-brainer.
THIS IS A NON-CONVERTABLE NOTE.
This transaction provides an additional 55mm in liquidity for the next 3 years. The rate may be a little high but they didn't have to issue additional equity. Everything is in alignment for this company to do much better in the near future. Additional CNG/LNG stations are being added at a good clip. class 8 truckers are adopting the new engine and many more cities are initating or expanding their bus fleets to cng.
Short interest is still high and the stock has been moving higher.
1) Truckers save nearly $2.00 per Gallon. If the average truck burns 20,000 gallons a year they save nearly $40,000. Adjust for the higher initial cost, 10% lower gas mileage and currently fewer CND/LNG stations they may have to travel a little out of the way to get fuel costing time and travel expense. Basic economics are driving the acceptance in this market.
2) CNG station owners may invest 800k to 2mm for their facilities. Most are not like Clean Energy that could build and wait for the market to develop. Today the stations can see that the WPRT engine is being purchased and the market is growing. They are getting commitments from truckers and starting construction on additional locations which will enter service in the next 12/18 months. Once again the economics will drive the market. CNG stations access their gas for about 50-70 cents a gallon and sell it for about $2.00 A nice markup compared to diesel. It cost about 14-16 cents to compress it and the extra facilities costs of the must be depreciated but if they can get a commitment of 20 trucks to fill at the station they will have about 400000 (20*20000*$1.00) in cash flow which should cover their costs and get them to breakeven. Anything above the committed 20 trucks and they will start to earn a nice profit.
As additional stations are built more and more truckers will achieve the economics to switch to NG driving additional economics for both the trucker and station owner. Up to now it has been chicken and egg, The station owner didn’t want to spend millions for a station that had no trucks and the trucker didn’t want to spend an additional 60k for a truck that had limited range with no stations.
If each new station needed 20 trucks then 5000 trucks would be needed just to fill minimum commitments of 250 new locations add another 4-5000 units a year to fill in existing fleets and WPRT is a winner.
Its just basic economics.
of 7mm shares while normal volume was about 1mm shares. I bet most on this board thought "short covering" but if you look at the numbers, shorts only covered 240,000 shares from April 30 to May 15. that was from 11.73mm down to 11.49mm.
Any indication that orders are picking up will send this stock well above fair value in short order. I don't know when this will happen but at these levels I don't understand the risk/reward position of the shorts.
we have just started an up leg and the short interest is quite large. This stock could easily be back in the mid 30s by the end of the summer. Hold your shares and let the shorts sweat.
RWC needs to stay above 4 at quarter end. This will allow the company to get on the radar of some small cap funds. RWC has the growth, positive earnings for the last several quarters, Just a few quarters away from positive retained earnings, with costs under control. This stock could get a nice boost with a 3-4mm contract. If just a few small cap funds were able to place 100k shares or so in this company the stock could easily rise into the mid 5s with its small float,
I believe that the next 3 months will be the best 3 months this stock has had in the past several years.
THIS YEAR THEY ARE ADDING TO POSITIONS AS HIGH AS 3.99.
They must believe that that things will continue to get better considering that they are wiling to continue to add at higher levels. I believe that 2014 will be a good year for RWC but the continued buying by privet leads me to believe that we may have some decisions on contracts in the near term. I believe that we will have a 9-10 million revenue quarter in the second quarter and any major win will be icing on the cake.
NEARLY HALF 1.1 are owned by just 500 fleet owners. WPRT doesn't need an order for a 1000 or so engines from any one owner but an order for 10 -20 trucks from each of these fleets. Each fleet has to climb the learning curve. In the past 4 months the number of CNG stations have climbed from 668 to 713 but this is just a fraction of the 6000+ diesel stations nationwide. Its just a matter of time and I believe that most fleets will experiment with some number of NG engines on the limited routes that have available access to CNG. As the density of CNG grows linearly the available routes will grow exponentially.
We would all (expect the shorts) like the growth to be explosive from the introduction of the new 12L engine but have to be realistic. The configuration costs about 60k more than a traditional engine. These managers will test some engines this year add a few more next year and then, assuming that the economics still exist, will ramp up expansion to take advantage of the lower costs and the increased availability nationwide. Look at a map from "Alternative Fueling Station Locator" and you can see fairly good density in CA and OK and a few other corridors. The addition of a few hundred more stations will open the market for many more trucking routs. I expect to see steady qoq growth for the next year then a increasing growth in the next 3-6 quarters.
The time to buy WPRT is now because once the growth becomes apparent this stock will be much higher.
Keep an eye on the number of stations nationwide. If the pace of new stations accelerates then Westport stock will also accelerate.
WILL FORCE fleets to take another look at natural gas alternatives. Im betting that these higher volatile oil prices will boost the market from about 3% to 4%. a nice 33% jump. It would be irresponsible for fleet managers not to get a few NG engines and the learning experience that they need for a new technology and the logistics that may be needed for their particular routs. These fleets can not wait for the price of oil to reach 2008 highs prior to taking action. They MUST have the experience and learning curve under control, and if the price of oil were to spike because of international tensions, they will be able to react and order the proper number of NG units to offset their uncertain fuel requirements. If they wait and the competition goes down the learning curve and and a future event were to occur then the competition will make the proper choices and the fleet manager will be out of a job as the competition will have lower prices and steal their clients.
added calls to my long position today
I thought that q1 last year would be tough to beat with the order from the forest service in March last year. The company had announced many orders this year but unless they tell us on the call how much of a backlog they have going into the second quarter we won't know how many of those orders were filled in the first quarter. Lower inventories and high receivables indicate a good deal of the sales were at the later stages of the quarter. Earnings appear to be the same as last year (3 cents) but they were just shy of 3.5 cents. an additional 5000 in earnings would have rounded up the per share figure to 4 cents. The one disappointment were lower gross margins, Mix and competition seem to be the main culprits, management indicated that fixed costs were spread over smaller production but that didn't seem to have any material impact in my opinion. I thought that would have been offset with lower amortization. My model shows that we should stay at these lower levels of amortization for the next 5-6 quarters. Over all sales came in higher than $6.7mm that I expected and earnings were better than my 2 cent expectation.
The key to the stock movement will be the backlog. If we have a large backlog then many of the sales in the first quarter may have been from smaller unannounced sales. On the other hand if we have a relatively small backlog then the company is still highly dependent on these lumpy orders.
Lets hope for a good call.
as an order was filled in March that has in the past and also this year in the second quarter. That led to a weaker second quarter last year. It looks (with recent announced orders) that growth continues with RWC but the timing has shifted back to the second quarter. When compared to last year, I expect both sales and earnings to be lower but both to be higher by the end of the first half. The stock may have a small sell off after the release but Mr. market usually looks forward and I expect the stock to show strength for the next several months. I look to buy if it dips on earnings. Management has never given any guidance but maybe we can get a question on the conference call as to the amount of backlog they carried into the second quarter which will let investors better determine sales and earnings for the first half.
Many large accounts only replace a portion of their radios each year. A city may have 1000 radios and replace 20% each year with a 5 year cycle. Its tough to break in because they want to have one platform ant therefore the city continues to buy motorola even though they have a higher cost.
Sooner or later I believe that RWC will get a larger conrtract that may well lead to others to consider its purchase.
THEY HAVE TO GROW REVENUES FASTER THAN VARIABLE COSTS. Look at gross profit minus selling expense last year the gap was only 1 mm this year with 100% increase in revenue the gap is only 7mm. R&D ate all of that and you still have the fixed and growing administrative exp. For this company to have any value they must have revenues grow much faster than variable costs and I don't see that at this time.
RSH 5 year notes now trade at 38 cents on the dollar with a yield in the 32% range. This tells you that the company has nearly no chance of survival. This price indicates that they don't expect to be paid on time and that they (the bond holders) will only get a few cents on the dollar for their investment. If this turns out to be the case then the stockholders will be wiped out but then again a buck and change stock price already reflects the situation. Debt outstanding is above 600mm while current assets will only cover a small fraction of that amount. The company has no real estate (ala SHLD) to fall back upon. It will be sorry to see one of the best known retailers with one of the largest number of locations close forever.
let the bond market direct you to the proper move.
Last year they got a 2.4mm order from the forest service that normally arrived in the 2nd quarter. It looks as if this order this year returned to the 2nd quarter but I can't tell from the press release what quarter the products were delivered. Lumpy orders and the timing always make quarterly projections tough especially for small companies. The company did 29 mm in revenue last year and I project 36mm this year but the timing is uncertain. Relm has a current break even level at about 24mm and earns about 2.5 cents for each million above break even. My call for 2014 is for 30 cents in earnings. Russell 2000 p/e for companies with earnings is currently 22x. Relm therefor could have a market price near $6.5 if everything works as predicted. I would discount the p/e by 20% because of the lumpiness an unpredictability of the earnings giving a price target near 5.25. So far this year they have announced orders at a much quicker pace than last year($8.6mm) giving me confidence that they are well on their way toward my revenue goal.
Last October they were named on a 9.5mm homeland security contract in which they delivered a small quantity (i believe for additional testing) , If RWC gets an order for $3mm or more on this contract I would expect at least $.75 move in the stock. This may be just wishful thinking on my part but my chips are on the table.
I saw that they issued 3mm a few months ago.
THANKS IN ADVANCE