While the financial markets hang on Warren Buffett's every word and traders and arbitrage players follow Carl Icahn religiously, there is one super-investor that is relatively unknown. It is quite astonishing how little known this stock picking guru is considering his most impressive track record over the past dozen years. Our mild mannered and all but invisible investing superhero is Kevin Douglas. Stealthily flying under everyone's radar, he has garnered one of the most impressive stock picking track records, placing him at the top of our list of gurus to follow.
Making his initial money as the founder and Chairman of Douglas Telecommunications, a VoIP company, his talent for stock picking should make all but the best investment minds blush with envy. For example, Mr. Douglas had accumulated 18.5% of the outstanding shares of Westport Innovations (WPRT) at prices up to $20 per share. The shares rocketed to over $50 this past March. Another example of his impeccable timing was the purchase of more than 300 thousand shares of Hansen Natural Corporation, now Monster Beverage Corporation (MNST). He made purchases in 2003 and 2004 for prices that averaged under $0.60 per share. The stock traded as high as $83.96 this past April. These examples are but a tiny peek at the incredible successes Mr. Douglas has profited from. For the few aware of his successes, any large purchases he makes should at least demand a few minutes of your attention.
The most recent purchases have been shares of American Superconductor Corporation (AMSC). In this case, he has attracted at least some attention but for the wrong reason; his investment in AMSC has taken quite a beating. In early 2011, Mr. Douglas was purchasing hundreds of thousands of shares of AMSC at prices as high as $28 per share. Shortly afterward, Sinovel, the Chinese wind turbine manufacturer and AMSC's largest customer refused to pay for products already delivered. Sinovel also cancelled orders worth over $1 Billion. Investigations ensued which culminated in one employee of AMSC receiving jail time for selling proprietary code to Sinovel. Needless to say, AMSC's shares were crushed and today trade at less than $3 per share.
Most investors would lick their wounds, chalk this one up to experience and limp away. Mr. Douglas? Beginning in late November, he's been buying again. Over the course of just 2 weeks, he purchased more than 1 million shares at prices ranging from $2.47 to $2.77. Including these purchases, Mr. Douglas directly or indirectly through family trusts owns 11,439,536 shares according to his most recent Form 4 filing. That is just shy of 14% of the 65,977,319 outstanding shares as reported by AMSC's latest 10Q filing.
Averaging down would be downright farcical, so what could possibly convince him to break out the checkbook and buy another million shares? AMSC's lawsuit against Sinovel might do the trick. AMSC has accused Sinovel of violating sales contracts as well as stealing its technology. In multiple suits, AMSC is seeking $1.2 Billion in damages in Chinese courts. Earlier this month, China's Supreme People's Court agreed to hold an additional hearing regarding the copyright infringement lawsuit.
Perhaps Mr. Douglas has recently become more confident that AMSC will win at least a partial victory. There seems little other reason for someone of his past successes to throw good money after bad. While I consider AMSC nothing more than a lottery ticket now, seeing someone like Mr. Douglas buying shares at these prices makes for a tantalizing gamble. When someone who has won untold millions at the blackjack table reveals how he's betting this latest deck of cards, it's worth a listen.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.