My end of year 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.
American Superconductor
AMSC
(market cap ~$0.70B)
American Superconductor has been working for years (decades?) to commercially develop and sell products based on their high temperature (liquid nitrogen) superconductors. I believe it was the CEO who typified their work as having a similar effect on the power infrastructure that fiber optics had on the telephone infrastructure. The analogy is not complete, because, as I understand it, the cables are too heavy to string between power towers. There is, however, a good market opportunity to replace underground cables, particularly in urban areas. More power can run down the same conduit.
These same cables and materials can be used to make more efficient electric motors, which are particularly useful for ships where weight and space are precious.
As I understand it, none of those products are generating substantial income, yet.
They do have products and services that are generating revenue. They may not rely as heavily on the superconductor technology, but they may be a broadening of the company's scope just as the alternative energy market and secure environment markets expand.
The company has been lucky or smart enough to build and sell load levelers, which should make power grids less likely to trip offline from a surge. They are for sale and I believe they were part of the program to re-grid, update and reinforce a few major cities (New York?).
Along the way, they are were also lucky or smart enough to acquire a wind turbine company, which seems to be doing very nicely.
The company's activities in superconducting cables are speculative, but the existing products make the company more of an investment. They may be profitable in 2009, which could generate significant interest in the investment community. They may have very good timing; especially, considering the new administration.
I will continue to HOLD, may have to SELL to pay some bills, and would consider it a candidate to BUY if I had sufficient discretionary funds.
DISCLAIMER LTBH since 2003 but those first shares are gone. |
