American Superconductor: An Ultimate Winner in Wind Power

When it comes to wind power, you cannot ignore American Superconductor (AMSC). The company provides an array of solutions based on two proprietary technologies: programmable power electronic converters and high temperature superconductor [HTS] wires. The company's AMSC Power Systems segment produces products to increase electrical grid capacity and reliability and supplies electrical systems used in wind turbines. The company sells must-have products in the wind power industry. This makes the company a unique player in the sector. The company stands out as a winner in several aspects compared to other players, such as Otter Tail (OTTR), Kaydon (KDN) and Trinity Industry (TRN). 

Investors like its worldwide reach. AMSC has a strong reseach and sales teams in China, a big wind power market. The company  recently received a $450M follow-on order from Sinovel Wind. Keep in mind that this is a follow-on order and, in my opinion, there are more to come. According to the Global Wind Energy Council’s Global Wind 2007 Report, China’s installed base of wind power capacity grew more than 130 percent in 2007, to approximately 6.1 gigawatts [GW].

In the US, AMSC will have a siginicant contribution to T-Boone Picken's wind power project. This will be mean tens of billions in revenue for the wind power industry.

AMSC can also play a big role in existing power grid. The company recently provided a $60M superconductor technology for Long Island to transport electricity without energy loss, while the current transportation invloves 5-10% energy loss from grid to substation. Investors got to like this.

The company's stock price has had a good run in the last 6 months; the recent pullback (thanks to the financial sector) is a great opportunity for investors to add a position. The company had a great last quarter and I would expect strong earning in coming quarters.

Disclosure: Author holds a long position in AMSC

Comments

[mrmarket]

"In the US, AMSC will have a siginicant contribution to T-Boone Picken's wind power project. "

Is this a fact or your opinion?

[MistaWhite]

I know Nebraska Public Power District (NPPD) uses AMSC in their wind farms. Nebraska is a region that was laid out in Pickens plan where wind could be used (not his Texas idea/plan)...I believe Pikens said he will be using GE turbines. The better question might be whether or not GE uses AMSC technology??

[GH]

For another, purer play on wind and wires, look at CPTC.

[aluman]

I suspect this is a largely bogus post.
If I'm wrong, please send a link or reference a newspaper article to support your link between Mr. Picken's project and American Superconductor.

Disclosure: short AMSC. (but would love to be given good evidence to cover)

[borisb]

All i know is that the president of AMSC premeditated sending the shares up to $45 on 2 out in the distance contracts and instantly dumped as many shares as possible by law near $45 on day 2-ish of the spike.

[stockanalyst]

amsc is likely a fraud. the sinovel contract is likely a fraud. no real company would use their components, especially GE who, like most large turbine manufacturers, makes their own. have you actually done any research at all into this company?

disclosure: short AMSC and believe it is worth roughly $5

[John Galt]

Insider transactions are indeed troubling at this company. I cut my position by 66% when the charts showed it rolling over.

[Road Runner]

Looks like a "pump and dump" article to me. It's long on praise and short on details. I don't know anything more about this company after reading this report.

Please stop posting these manipulative essays - I can't call it a report or article.

[joe master]

It's not a pump and dump and for those that question the sinovel contract theyare Citon Lemon lemmings. The sinovel company has purchased well over $100 MILLION IN PRODUCTS FROM amsc IN THE LAST 12+ MONTHS. They have ordered a three year supply contract for 4X this number and with the 50% growth rate of the Chinese wind market what is so hard tofigure out here? If you try shorting this you will get burned badly.

[stockton]

stockanalyst, I am a research analyst at a small firm and I couldn't agree with you more. I have been doing work on this stock for several weeks now and anybody that spent a few hours looking into how small the available market is vs. making generalizations about the China wind market and its expected growth would know that AMSC will not earn $1 / share until at least 2013. In addition, the Chinese are going to come on-board and create so much competition in the componenets space that it will drive down AMSC's market share and margins. It's worth $5 to $10.

[bobppc]

Did anyone mention the Navy angle? Guess not, when NBC and crony companies call this company American "Semiconductor&qu... it now wonder there are so many "short" suckers. Can we say "fleet" rework? What happened to industrial motors? "Copper replacement"?