Westport Story

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WPRT -- USA Stock  

USD 8.20  0.57  6.50%

As many investors are getting excited about consumer cyclical space, Westport Fuel and DENSO CORP may be going in opposite directions. We are going to break down some of the competitive aspects of both Westport and DENSO.
Published over three months ago
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Will DENSO CORP and Westport (NASDAQ:WPRT) make up?
By analyzing existing basic indicators between Westport Fuel and DENSO, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in DENSO with a short position in Westport Fuel. Check out our pair correlation module for more information.

Let's begin by analyzing the assets. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Westport Fuel has an asset utilization ratio of 120.64 percent. This implies that the company is making $1.21 for each dollar of assets. An increasing asset utilization means that Westport Fuel Systems is more efficient with each dollar of assets it utilizes for everyday operations.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two companies, such as Westport or DENSO is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

How important is Westport Fuel's Liquidity

Westport Fuel financial leverage refers to using borrowed capital as a funding source to finance Westport Fuel Systems ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Westport Fuel financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Westport Fuel's total debt and its cash.

Correlation Between Westport and DENSO CORP

In general, stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Westport Fuel together with similar or unrelated positions with a negative correlation. For example, you can also add DENSO CORP to your portfolio. If DENSO CORP is not perfectly correlated to Westport Fuel it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Westport Fuel for example, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down. Please check pair correlation details between WPRT and DNZOY for more information.

Note

Are you currently holding both Westport Fuel and DENSO CORP in your portfolio? Please note if you are using this as a pair-trade strategy between Westport Fuel and DENSO CORP, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses.

Going after Westport Financials

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Lets now check Westport Fuel revenue. Based on the latest financial disclosure, Westport Fuel Systems reported 252.92 M of revenue. This is 96.45% lower than that of the Consumer Cyclical sector and 95.02% lower than that of the Auto Parts industry. The revenue for all United States stocks is 97.32% higher than that of the entity. As for DENSO CORP we see revenue of 48.76 B, which is much higher than that of the Auto Parts

DNZOY
48.8 B
WPRT252.92 Million0.47
Sector5.08 Billion9.39
DNZOY48.76 Billion90.14

Our perspective of the newest Westport Fuel gain

The jensen alpha is down to 0.48 as of today. Westport Fuel Systems is displaying above-average volatility over the selected time horizon. Investors should scrutinize Westport Fuel Systems independently to ensure intended market timing strategies are aligned with expectations about Westport Fuel volatility.

Our Final Takeaway

Whereas some other firms under the auto parts industry are still a bit expensive, Westport Fuel may offer a potential longer-term growth to private investors. To conclude, as of the 18th of September 2020, we believe Westport Fuel is currently undervalued. It responds to the market and projects high chance of bankruptcy in the next two years. Our final 30 days 'Buy-Sell' recommendation on the firm is Hold.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Achuva Shats do not own shares of Westport Fuel Systems. Please refer to our Terms of Use for any information regarding our disclosure principles.

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