Westport Innovations: A Must Own Secondary
Very few scenarios occur where a stock drops due to an event that's a major positive for new investors. A secondary stock offering can be harmful to existing shareholders, but new investors get the advantage of a stronger balance sheet or a major insider reducing a position possibly overhanging the stock.
In the case of Westport Innovations (WPRT), the company is busy developing technology to take advantage of the switch to engines that can use the suddenly abundant and cheap natural gas supplies. In fact, a joint venture with Cummins (CMI) recently released the much hyped 12L engine needed for regional-haul trucks that don't daily return to the base of operations. As recently detailed in Westport: Joint Ventures Hide Major Catalysts, the release of this engine is one of several major catalysts that should propel the stock higher with one major catch at that point. That catch just happened to be the cash burn questions that he company solves in this offering.
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