Vuzix, eMagin & Westport schedules and much more ?3

10:08 06-Mar-20

Westport Fuel Systems has scheduled its fourth quarter report for Tuesday, March 17 after market close.  The average of 5 analyst estimates is a penny of EPS from $70.3M in revenue, increasing to $81.0M for the first quarter.  Brent has plummeted to a new multi-year low just below $47 on a report of Russia calling OPEC's bluff.  I've long written that American shale has the most to lose here, and , and WTI is less than $4 behind.  Natural gas is more stable, at $1.74, but Westport sits at the unfortunate intersection of transportation and Chinese growth via WeiChai.  That makes its virus exposure pronounced, and the stock price attrition very understandable.   I will cover the WFS report, but now is probably not the time to be adjusting positions.

By contrast, Vuzix does its manufacturing in New York, though cases have begun to climb there as well.  I have updated the originally erroneous timing for the report in this post.  The company continues to churn out niche applications, and I will give the report at least cursory coverage.  However, chances are, this isn't the stock you're looking for in the current environment.

eMagin looks worse yet.  The company has scheduled its fourth quarter report for the morning of March 10th.  I will only comment on the call if there is some positive surprise.

As I've said before, VOD would be a more likely investment candidate, and the CFO and External Affairs Director seem to agree, having bought 71K shares (7.1K ADRs) in London yesterday at £1.39 ($18).  Although Europe has more advanced virus concerns than the U.S., telecoms have limited exposure and could actually benefit from the trend toward personal isolation.  In this vein, NOK shares might also be tempting as they continue to drop.  However, my read on the recent collaborations with Marvell and Intel is that Nokia has just finished the design phase of its new SoCs.  That could still leave perhaps a year to actual device sales, with ramping expenses in the meantime.  I further note that while Europe's advanced network sharing is the right way to keep costs down, by eliminating redundancy it actually leads to more fragile societal services overall.  Nokia shares are down another 4% in European trading but I'm inclined toward caution in balancing value against the promise of new products. 

To conclude, I've been discussing the macro situation with an actuary who points to this data on the character of responses across the globe, noting that despite the infection rate, Korea's response has set a new standard for quality, whereas Italy looks little better than Iran.  I think both of use will be interested in comparing the U.S. and European responses.  As I originally warned, we're not near the end of COVID-19, but both market and societal responses seem fairly proportionate, so far.