If You Don’t Buy Westport Innovations Inc. Now, You’ll Hate Yourself Later

General Motors Company (TSX:GMM.U) (NYSE:GM) is betting big on natural gas, and that could be good news for Westport Innovations Inc. (TSX: WPT) (NASDAQ: WPRT).

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Last week, an event took place that added momentum to the massive rollout of this “Made in America” product… and it’s making investors a lot of money in the process.

Low prices are catapulting natural gas into a major transportation fuel. Today, trucking companies are converting their fleets in mass from diesel to natural gas to take advantage of the huge savings.

But natural gas isn’t just replacing diesel. It’s starting to replace regular gasoline. And for companies on the forefront of this trend, we could see share prices double — or more.

America’s addiction to foreign oil is coming to an end

As regular Motley Fool Canada readers know, North America is in the midst of an energy revolution. Thanks to new technologies like horizontal drilling and hydraulic fracturing, billions of barrels of previously unrecoverable oil and gas are now being pulled out of shale fields across the continent. The sudden glut of supply has ushered in a period of ultra-low natural gas prices.

General Motors Company (TSX: GMM.U)(NYSE: GM) sees this as an opportunity to help drivers at the pump. Earlier this month, the automaker began selling compressed natural gas (CNG) fuel systems on one of its best-selling sedans, the Chevrolet Impala.

The vehicle will be General Motor’s first passenger vehicle capable of running on natural gas. However, the new option won’t come cheap. The CNG Impala will cost customers an additional $9,000 over the standard model. But if they choose it, car buyers can shave 40% off the price at the pump.

General Motors isn’t the first company to introduce natural gas powered vehicles. Honda Motor Co. Ltd. (NYSE: HMC) launched an updated version of its CNG Civic earlier this year. For eco-conscious drivers, the model is a practical alternative to electric vehicles because a CNG car can travel almost three times farther between fuel stops.

The Ford Motor Company (NYSE: F) is also set to release a CNG F-150 pickup, the best-selling truck in America. Natural gas vehicles are popular amongst energy companies because they already have the infrastructure (and the fuel) on site. By switching to gas, they can save millions of dollars annually.

This trend is just getting started. Consumer demand for natural gas vehicles is growing as more and more CNG fueling stations dot the highways. And a number of other automakers have also announced plans to introduce natural gas-powered vehicles over the next few years.

This could all lead to huge gains for the companies that can take advantage of it. My favourite way to invest in this development is to buy “nuts and bolts” stocks that supply the natural gas fuel components to automakers. And there’s no better name in this space than Westport Innovations Inc. (TSX: WPT) (NASDAQ: WPRT)

Ten years ago, the company started helping garbage trucks and city buses adopt natural gas as a transportation fuel. Over the past five years, blue-chip giants like FedEx CorporationWaste Management, Inc., and The Coca-Cola Company have begun using Westport’s technology. Today, Westport is getting calls from railroad operators, shipping transporters, and cell phone tower owners that are now interested in natural gas.

Most importantly, the company has a tight grip on this emerging industry. Westport and its partners have filed over 700 patent applications for natural gas engines. That means it’s almost impossible for a competitor to enter the market without infringing on at least one of the company’s patents.

This natural gas stock could triple your money

Westport is expected to grow its earnings at a 30% annual clip over the next five years as more large trucking fleets adopt its technology. However, that forecast could be ultra-conservative if natural gas engines make their way into passenger vehicles.

Today, less than 0.05% of the 234 million vehicles in the United States run on natural gas. But if Westport can capture just 1% of this market, the stock could triple from here.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robert Baillieul has no position in any stocks mentioned. David Gardner owns shares of FedEx and Ford. The Motley Fool owns shares of Ford, Waste Management, and Westport Innovations and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola.

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