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Industrial Stocks

The Best Way to Play Natural Gas as a Transportation Fuel

By Elliott H. Gue, on Nov. 5, 2013

Cummins is North America’s leading supplier of natural gas-powered engines for buses and similar vehicles, and the company remains our favorite way to play growing consumption of natural gas as a transportation fuel.

Investors interested in this trend often ask my opinion of Westport Innovations (TSX: WPRT, NSDQ: WPRT), a smaller-capitalization name that produces natural gas-powered engines.

Although Westport Innovations’ fuel systems represent an important technological development, the company is a chronic money loser. Meanwhile, Cummins and Westport Innovations in 2001 formed a 50-50 joint venture to design and manufacture 6- to 12-liter heavy-duty engines that run on natural gas.

In other words, an investment in Cummins gives you exposure to the future of natural gas-powered engines without the inherent volatility of Westport Innovations.

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