|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 $0.143B is $0.16B)
AMSC is a company that should be an investment because by now they should be making regular money from their divisions. AMSC utilizes technology to improve the efficiency and reliability of our power infrastructure. Their superconducting cables, motors, and power regulators can benefit from any energy source. If solar succeeds, it can use AMSC equipment. The same is true for geothermal, etc. In an auspicious moment a few years ago, AMSC had surprising success with a wind turbine design business. The subsequent revenues overwhelmed the financial reports, drove the stock past $40, and seemed to be a fine complement to the superconductor division that was in development. Unfortunately, their main wind partner apparently stole the intellectual property, cancelled contracts, and began competing against AMSC. The news of the lost revenues dramatically dropped the stock, a drop from which the company has not recovered. The superconductor business continues to show promise, but it isn't demonstrating sufficient sales to replace the wind power division. The technology continues to prove itself. The need for power efficiency continues to increase. The company may well yet be well positioned.
The company's financials continue to look favorable. Price to sales and price to book are both less than two, which is uncommon (except for lately) for innovative companies. The intellectual property theft is gaining prominence and support, and may even be a key case as the US negotiates trade agreements with China, the home of the company that had been AMSC's customer. I don't like investing based on court cases. They take too long to resolve and don't generate as much income as the business lost. I wouldn't buy the stock based on the trial, but I do consider it a good reason to hold what I have. I also continue to believe that they may gain traction with the utility companies, particularly as the Tres Amigas project moves forward. Using AMSC's technology to link the US' three separate power grids would be useful, high profile, and probably profitable. The company's cash position is tenuous enough that something may have to be sold off (or so I've heard.)
To get the stock back to a price to sales of about six would quadruple the stock. That is today's potential without including the present value of future revenues. This is encouraging. The increased visibility from the court case may increase demand for the stock as well.
DISCLOSURE LTBH since 2003 but the first shares were sold years ago. My finances are strained by similar stories throughout what I thought was a diversified portfolio. My house may go into foreclosure, and additional sacrifices may be made, including selling stocks I'd rather hold, or even buy. So, if I sell, it will probably be because I have to, not because I want to.
(I've also collected links to the other discussion boards and my other stocks over on my blog trimbathcreative.wordpress.com