|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 $0.106B EOY13 is $0.129B mid14)
AMSC was originally called American Superconductor, but that was back when they identified themselves by their leading edge "high" temperature superconductor products: wires, cables, motors, etc. Now they are AMSC and their two main divisions are Wind and Grid; Wind from a fortuitous M&A a few years ago, Grid from several products some of which rely on superconductor technology. For most investors the story revolves around the intellectual property theft case being tried in Chinese courts regarding the loss of several hundreds of millions of dollars of revenue that happened about the same time as AMSC's intellectual property began showing up in a customer/competitor's products. The company's long term story should still be its goods and services.
From a high of over $40 to a low of under $2, largely coincident with the Chinese situation, the company has continued to develop their core technology, expand their Wind market beyond China, and expand their Grid market through cables, regulators, and the Tres Amigas project.
The upside is that the investment community is only now beginning to look beyond the upset initiated by the Chinese intellectual property issue. Simultaneously, the need for more efficient power transmission continues to grow. Ideally, the superconductor market should be developing regardless of the Wind intellectual property issues.
The downside is that, while there is growth and there are encouraging words from management, the financials do not tell a compelling story. Growth has been erratic. High temperature superconducting cables and motors present a compelling story, but the sales have been slow to materialize. The main cautions I see are the ever-present possibility of mis-management, and the possible competitive pressures of other materials like graphene.
On balance, I am encouraged by the fact that near term catalysts could be positive news from China, increased sales of core products, progress with Tres Amigas, and the increased demand for better power efficiencies. Plus, the stock is trading at Price/Book and Price/Sales of less than 2, which is below my expectations for such a high tech company in a growing market.
DISCLOSURE LTBH since 2003 but the first shares were sold years ago, fortuitously in hindsight because I actually made a profit.
(I've also collected links to the other discussion boards and my other stocks over on my blog trimbathcreative.wordpress.com