Pacific Trader: Will Westport Fuel Systems finally deliver on its carbon-cutting promise?

The alternative energy company is branching out into hydrogen-powered engines.

Credit: Courtesy of Westport Fuel Systems

Volvo heavy-duty truck powered by a Westport LNG engine

The alternative energy company is branching out into hydrogen-powered engines

The stock: The markets bottomed out on March 23 last year amid the shock of COVID-19’s first wave. As a thought exercise, the Globe and Mail?‘s David Milstead ran a screen on the performance of the 231 members of the TSX Composite index in the 365 days to follow. Popping up in the No. 2 spot (behind only AcuityAds Holdings, TSX:AT) was Vancouver’s own Westport Fuel Systems (TSX:WPRT), with a staggering 957.8-percent return.

The drivers: It’s hard to call Westport a startup, seeing as it’s been kicking around the alternative energy space since the 1990s. Most of that time, the developer of trucks powered by (relatively) clean-burning natural gas did little but punish its public shareholders—its stock peaked at nearly $70 in 2000. So the true believers must have felt a sense of vindication as the company posted a small net profit in the most recent quarter, supported by ever-stronger CO2-reduction policies worldwide.

Since David Johnson’s appointment as CEO in 2019, Westport has expanded upon its compressed natural gas (CNG) and liquefied natural gas (LNG) designs to include even lower-emission engines fuelled by propane and hydrogen. This is timely, because the consensus is shifting away from the use of natural gas as a “bridge fuel” to a lower-carbon future; growing numbers of people in industry, finance and government now advocate making the leap straight to zero emissions. The association with the much-hyped H-word may have something to do with Westport’s phenomenal run of late.

Word on the street: The run-up in Westport’s stock price—after hitting a high above $15 in February, it’s settled in around $9—has prompted analysts to revise their target prices upward. Amit Dayal of H.C. Wainwright & Co. in New York projects that revenue will jump 40 percent this year and quadruple to US$1 billion by 2030: “We believe the company is uniquely positioned to provide existing CNG/LNG customers with a path to hydrogen offerings.”

Coming and going: If you believe the pandemic-era shift to remote learning will be permanent, take note that Vancouver-based digital training platform Thinkific Labs has filed papers to go public on the TSX big board under the symbol THNC.