My mid-year synopsis of AMSC - 2018
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
AMSC (market cap is $0.147B was $0.070B)
AMSC was founded to sell power technology solutions based on their ability to commercially produce superconducting power cables for electricity infrastructure. As typified previously, they hoped to do for electricity what fiber optics did for information, put a lot down a little pipe. They successfully developed the technology and manufacturing processes to do so. They also bought a wind turbine design firm, which became a major revenue generator until one of the customers decided to become a competitor. Another major venture was to help tie three major US electrical grids together, helping distribute uneven energy sources like renewables, and also reduce the incidence of brownouts.
Sadly, the idea of replacing old cables in old cities with new superconducting cables hasn’t generated significant sales. The application of the cables to power regulation and distribution, however, has been more successful. The wind turbine business was stymied by the intellectual property theft and the loss of a major customer. That loss also signified a dramatic drop in the stock price, effectively identifying the company with that one revenue stream. Tying the major grids together is experiencing a familiar situation for long term projects in conservative industries, delays and redefined goals continue.
Having problems in one or two divisions isn’t a surprise, and is one reason for diversification. The total effect, however, has been a steady reduction in revenues, a decline in profits, and a departure from the profitability I thought they were so close to. The stock continues to be tied to the intellectual property theft resolution rather than goods and services. A possible positive resolution may explain the increased market cap.
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 |
