|My EOY review of AMSC|
INTRO Here's my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.
AMSC (was called American Superconductor)
AMSC (market cap was $0.081B mid 2015 is $0.089B EOY2015)
AMSC was founded to make and sell superconducting cables and products based on those cables. As they stated several years ago, they intend(ed) to do for power what fiber optics did for communications through a particular material mix and configuration. They conquered significant technical and manufacturing issues, but are probably best known for their wind turbine division that reached hundreds of millions in sales before the superconductor issues were resolved. Subsequently, the prime customer for the wind power switched from being a customer to being a competitor, raising significant issues of intellectual property theft that are still being worked out in China's courts. They are also involved in Tres Amigas, an effort to connect the three main US electrical power grids that have never been connected. They continue to sell cables, motors, and voltage regulators to major utilities; but not to the expected extent. The slow sales may be an internal issue, superconducting cables may not offer a significant cost advantage, or the power industry may be moving slowly. The wind turbine business is reviving, but has a long recovery to regain its prior success. 2015 revenues were down from 2014 which were down from 2013. The stock collapsed after the theft, the CEO left, and the company decided to split the stock 1-for-10. Without that, the stock would be trading for less than a dollar. (https://trimbathcreative.wordpress.com/2015/03/25/a-sad-reverse-split-for-amsc/)
The demand for efficient power systems is growing, so AMSC should be in a good position. There are encouraging signs, including a recently announced $210M multi-year partnership agreement for the construction of wind power systems. Recent sales are to India, which is a good sign. Wind power, in general, is also a growing industry. If the issue with the superconducting cables is conservatism, then patience is all that is required. If the issue is the sales campaign, internal shifts are all that is required. If the issue is technical and financial competitiveness, then the company may have to rely on the wind segment.
I continue to Hold because my position is small. If the stock rises to my cost basis for those shares, that will be a ten-bagger. Overall, considering shares sold earlier, I believe I still have a profit. Much of the stock's fall was due to an over-reaction to the theft. Currently, the stock is trading at less than book value and less than sales. Stock in a growing company should have a premium, and AMSC is poised for at least some, and maybe significant, growth.
DISCLOSURE LTBH since 2003 but the first shares were sold years ago.
(I've also collected links to the other discussion boards and my other stocks over on my blog trimbathcreative.wordpress.com