Macquarie's Mike Newton likes Westport Innovations

Macquarie Private Wealth portfolio manager Mike Newton says Westport Innovations should benefit from a renewed focus on energy independence in the United States.

Back to normal.

In the worldwide financial markets, crises have become ordinary. From the “Great Recession” of 2008 to the current problems in Europe, investing has been fraught with rough waters.

Mike Newton, Associate Director and Portfolio Manager of Macquarie Private Wealth says there will be a day when investors are sailing, not paddling. Newton was on BNN’s Market Call Tonight yesterday with host Mark Bunting to talk about North American Large Caps & ETFs.

Newton says the current rally in the S&P 500 probably doesn’t signal the beginning of this calmer period. The upward move in the markets, he says has been choppy and volatile and is the “least respected” rally he can remember. The Macquarie fund manager says Canada’s huge weighting in commodities and energy has meant that the current rally has had very little effect here.

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One name Newton figures might resume its upward trend is Westport Innovations (TSX:WPT). He says everyone has been cheering for the company for a long time because it has “all the components for a major macro theme”. That theme, he says, is energy independence, and it has taken a back seat to the Euro crisis and the US election. Once those things begin to leave center stage, Newton believes there will be a renewed focus on energy independence in the US, and Westport, which has been signing significant partnerships and increasing its order backlog, will be a natural beneficiary.

Newton does not yet own Westport, but says he is considering making it one of the 18-22 equity positions in his fund.

Westport Innovations grew out of a research project at the University of British Columbia’s Mechanical Engineering Department. A professor there, Philip Hill, was developing a concept called high pressure direct injection (HPDI) of natural gas. In 1994, Hill met current Westport CEO David Demers. The following year, with HPDI technology as its principal strategic asset, Westport Innovations was formed. Today, the company boasts a market capitalization of more than $1.7-billion, has attracted legendary investor George Soros as its largest single shareholder, and has created valuable partnerships with some of the world’s largest engine and vehicle manufacturers, such as Volvo, Kenworth, and Cummins.

At press time, shares of Westport Innovations on the TSX were up 2.2%to $36.97.

Click here for the full interview.

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