| | | My semi-annual 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 $0.064B EOY14 is $0.072B mid 2015)
AMSC originally stood for American Superconductor, a business based on the sale of superconducting cables that could be used for increasing the efficiency and density of power transmission, electric motors, power grid voltage regulators, and hopefully many other products. During their development, they acquired a wind turbine design services company, which was highly successful for a while. In the meantime, they conquered the technical and manufacturing hurdles necessary for sale of their products. They were a nicely diversified, power-efficiency firm just as the world needs more efficient power infrastructure.
Unfortunately, the high-profile success of the wind turbine business was undermined by intellectual property theft. The market possibly over-reacted, which would have been temporary if the superconductor business had become more profitable. At this point, the court case for the IP theft looks unfavorable, despite excellent evidence; the superconductor business has achieved some sales, but either because of an intransigent industry or from poor marketing, the sales are not sufficient to lift the company's revenues. A promising side venture, Tres Amigas, intends to unite (and profit from) connecting the three US power grids, but the project and the company may not be as closely tied because the company has had to shift strategies considering the lack of sufficient sales.
The company and the technology seem to be in the right place at the right time, but are far from their heights. Annual revenues are down and they continue to report losses. Business can always improve, especially because energy efficiency remains important. Early advances in solar and wind could benefit from higher efficiency powerlines, but the renewables' efficiencies are becoming high enough that power is becoming decentralized, reducing the need for powerlines. I am also concerned (for AMSC's sake) about advances in graphene (of which I am a fan), which, while not ready for market yet; have the potential to produce competitive products. I've never been an advocate for reverse splits, and since AMSC's the stock continues to fall. A positive court resolution, or a significant order, or both could dramatically improve the company and the stock, but my expectations are low.
DISCLOSURE LTBH since 2003 but the first shares were sold years ago. I'll continue to hold, but would only buy more if there was significant, positive news.
(I've also collected links to the other discussion boards and my other stocks over on my blog trimbathcreative.wordpress.com |
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