Five American Innovators to Buy During the Current Downturn

With the gloomy financial news coming out of Wall Street, it may be tempting to bail out of all US equities and invest in a Russian ETF. But that would be a bad decision. A bear market creates buying opportunities.

We invest to make money but your portfolio can also reflect your moral and nationalistic ideals. A country is a family. Everyone matters. Never quit. Never turn your back. I recommend buying innovative American companies with a significant customer base in emerging markets (line your pockets while reducing the trade imbalance). The current landscape is littered with good bargains – like these five:

• Boeing (BA) recently received an order from Air China for 15 Boeing 777s and 30 Boeing 737s at a cost of $6.3 billion. Boeing Q1 2008 profits soared 38%. There are currently 50 new airports being built in China. Airline travel is growing at a rate of 5% a year. Analysts predict $3.1 trillion in Boeing sales over the next two decades.
• Newmont Mining (NEM) is a $22 billion market cap gold producer that comprises 10% of the Amex Gold BUGS index [HUI]. They have properties in the US, Australia, Peru, Indonesia, Ghana, Canada, Bolivia, New Zealand, and Mexico. Last year Newmont posted $2.3 billion gross profit on revenue of $6.25 billion. Currently 85% of the stock is held by institutions. As the market jitters continue, retail investors will stampede to gold.
• American Superconductor (AMSC) is a $1.5 billion company that makes electronic converters and superconductors for wind turbines. The burgeoning Chinese wind power industry is already hooked on their products. Quarterly revenue growth is 101%. As the price of oil goes up, more countries (including America) will be monetizing wind.
• Zoltek (ZOLT) is an $800 million company with sales of $175 million and quarterly revenue growth of 34%. They make carbon fibers used in wind turbine blades, compressed natural gas tanks, fuel cells, automotive parts and components, bridges, reinforced concrete etc. Zoltek is hitching a ride on the infrastructure boom in China and India. 
• Transocean (RIG) is $43 billion company that sells equipment and expertise to the oil and gas drilling industry. They own and operate 139 mobile offshore drilling units. They had sales last year of $8 billion with a profit margin of 46%. With skyrocketing energy prices, drilling programs will be ramping up.

 

Comments

[Postal Borders:]

I am a Independent Inventor. The average American has Zero visibility of the fact, Invention and Intellectual Property/Patents, are the foundation of Corporations and ultimately, the Economy.

Facts stand; Over 60% of innovation that takes place in the United States every year, is due to the Independent Inventor. Out of that margin, less than 1% makes it to market... At the same time, the United States lags behind other countries in innovation and moreso, younger folks lack interest on technology.

All of this invention is at our fingertips yet only 1% makes it to market!#%@ ? Why? At the same time, corporations have well established selling out our manufacturing processes to over seas.
As well, or more concisely, not so well; the United States outsources more and more with services in the technical arena. Example, Information Technology /Computers.

Furthermore, it is a standard, unethical process here in the United States, to practice cut throat business tactics that steal and undermine the majority of Innovators of their ideas.

Our code of ethics, all in the name of Business, needs to be redefined... This may be a news flash, but its already so far underway, it may simply be too late-

There are a ton of great ideas here in the United States and we are too busy robbing from ourselves, while the folks with big wqallets and already established corporation continue to practice cut throat business tactics, while they go home, and look in the mirror, and tell themselves how wonderful they are-

The United States, as well as any country, is a family. We back stab and play each other down on levels that only bring the unfolding hell, that is the world around us, and the spiralling demise
which exist in this once great Nation-

I am a Independent Inventor. I have really great ideas and as well have received a US patent, which the Description of the Invention and Claims, embrace a wide umbrella for clean advanced technology that can easily be implemented and only lacks funding-

Most folks take an article like this like I am "Crying Around" and looking for a handout- So, that is why, I am not giving my name, nor Patent info, so that slow belittling comments fall short-

We have answers here in the United States and we bury ourselves on multiple levels-

Again, the Economy, which I have come to call the big E-Con, as it is a Con Artist practice at the fundamental levels on which we all thrive- or Not thriving more clearly put-

Ford motor company is crying to the Britains for a helping hand- Because they cant see past next week. Im so ashamed of this.

What in the hell is wrong ? Its you...its me... its everyone-
I am fighting the good fight here and trust these words...my findings of these facts are very, very real-

We are a sinking ship folks- wake up.

Respectfully,
Postal Borders

2008 Jul 27 05:52 PM

[GripperDon:]

[Comment edited for abusive language. Commenter put on notice] I have worked for NASA< big aerospace corps and Big Automotive companies and a lot of consulting. Over 100 inventions and about the same number of patents. OK now that thats out of the way lets get on to the problem(S)

1. Technologists are seriously underpaid.
2. Managers of Technologists are overpaid

I cover that a later day, but since it is true everyone wants to be a manager and not a true engineer, scientist, physicist, medical, etc but get that wonderful MBA woun't help the world or make a product to save a company or give anyone a good salary except the holder of the MBA.

Sound bitter no way I am fine but the country is not it's PC but losing it'w ay. Teachers making $20 to $30 an hour but the lawyers rack up $350/hr.

CEO's get millions and contribute nothing usefull unless you consider being able to lay folks off brillant. Brilliant would be being ahead of the product need curve. You woun't find much of that kind of thinking in the board room.

SO ?

Kill the mind numbing spirit killing, distracting garbage on TV and use it for good stuff.
Get the families back together so they can instill real values in the youngsters.

Once that happens we will be on the righ tract and have a government really wanting to serve the people not themselves.

People trearing others with the golden rule will make the country strong and while and so it will be the companies.

All we have to do is regain our values and everything will start moving in the right directions again. Working for products that will help make us strong in the correct sense of the word.

Just imagine trading in a few corporate jets and some oversized mansions and mega boats for a lot of folks having a more secure life better educated and healther.

2008 Jul 27 09:23 PM

[Alan Young:]

First about, your picks:

Boeing is in debt, and is struggling to keep a sliver of the hugely-bloated military procurement business. The market for commercial aircraft is nearly dead. If you're counting on China, how loyal to Boeing do you expect them to be? They are surely producing their own aircraft, and their fleet expansion will slow down.

Newmont--trailing P/E of 700.

AMSC hasn't turned a profit. It has potential, but it's speculative.

Zoltec's main product is airplane brake pads. See Boeing comment.

RIG is a falling knife, although it might have value when it finds a bottom.

Now about your rationale:

"Moral" ideals--sure. Mine don't include building bombers and amassing gold, but you are welcome to your own.

Nationalistic ideals? Everyone matters? Wow, that's nice to know. So the traders and speculators who pocketed the trillions of $$ lost in the mortgage scam, and the savings-and-loan scam before that, are going to share their gain with all of us? When that happens, I'll gladly reinvest my share in the US market.
... But wait--aren't you Canadian? Why are you telling American readers to be nationalistic?

2008 Jul 27 11:33 PM

[atotonilco:]

At least Aalan had something to say about the stock choices. This site should not be the place for ranters and raivers on the social ills of our economy. Let's stick to the investment values.
I would like to know why Aalan thinks my investment in RIG is a falling knife.

2008 Jul 28 07:40 AM

[Ishortyou:]

Zoltek has a lot of potential now that some countries are jumping into the 'green' wagon, hopefully their sells will be up.

2008 Jul 28 08:32 AM

[David Black:]

As of settlement date 07/15/2008 AMSC short position increased by 13.06% to 16,346,013 shares; that's an unconscionable 43.61% of share float. 276 Institutions own 71% of the share float. On 7/22/2008 Veredus Asset Management acquired 653,835 AMSC shares. The 10 largest Institutions Investors own approximately 19,000,000 AMSC shares. The 10 Mutual Funds with the largest holdings own 13,800,000 AMSC shares. Kevin Douglas owns 3,242,800 AMSC shares. With the recent acquisition by Veredus Asset Management, these long term holders (i.e. they are not interested in shorting AMSC) own 36,736,600 AMSC shares. Subtracting 36,736,600 shares from the float of 40,700,000 shares leaves us with 3,963,400 shares available for trading. Yet, the short position is 4x the 3,963,400 AMSC shares readily available for trading. It's obviously a naked short; in other words, illegal.

This abuse has taken place ever since July 2007 when SEC removed the up-tick rule for short sales. It is high time SEC clamp down hard on this abuse that is all-too-pervasive through the securities industry. Accountability is non-existent; it needs to be immediately addressed and rectified quickly.

Departments of Energy, Homeland Security & Federal Energy Regulatory Commission, to name a few, are actively financially supporting the pioneering efforts done by AMSC. The short sellers of AMSC are endangering our nation's security; this illegal practice must be stopped.

2008 Jul 28 09:12 AM

[deee:]

hello that is the good ole boy network.

2008 Jul 28 09:51 AM

[John Lounsbury:]

GripperDon - - - Please observe the warning and keep writing (cleaned up stuff). You are addressing important imbalances in our business system. We have evolved into a welfare society for the poor and a welfare society for the rich and powerful, supported by the 70-80% in the middle. The middle will keep stretching until it breaks if we do not find a way to improve things. We have government policies that protect the entrenched interests and do not encourage entreprenures sufficiently. One might argue that deregulation of the finacial sector was done to encourage financial entreprenureship, but I would argue that it simply created space for the established financial system to create fraud.

How about a system that allows inventions to compete for funding based on merit rather than on the basis of how little they will disturb the establishment. I worked most of my career in a large international corporation and saw it do great damage to itself and society because the leaders chose to protect their vested interests rather than accept and promote new technology that eventually proved to be world changing. Unfortunately, this happens all too often.

2008 Jul 28 10:44 AM

[Postal Borders:]

Ok, I see GripperDon and jlounsbury59 are in the right Zone. atotonilco is exercising the glue, dooming the entire country.

atotonilco, look in the mirror. you are wonderful...

2008 Jul 28 02:43 PM

[Postal Borders:]

following Guy Bennit here... good work Guy.

2008 Jul 28 02:44 PM

[Postal Borders:]

A country is a family. Everyone matters. Never quit. Never turn your back. I recommend buying innovative American companies with a significant customer base in emerging markets (line your pockets while reducing the trade imbalance

2008 Jul 28 02:45 PM

[rambus:]

I can't understand why rig doesn't pay a dividend if they made 8 billion with a 46% profit margin. Global Sante Fe would have done better on their own. Every one is recommending rig but it has gone nowhere since the merger.

2008 Jul 28 03:22 PM

[Calvin C.:]

DING DING DING! You are diversified! Welcome to Cramerica!

2008 Jul 28 10:12 PM

[User 227352:]

Thank you all for comments and criticisms, the full article (which is more political and personal....is here..

www.q1publishing.com/

It is entitled: Why The Bull Market is Over and America is still Great.

Guy Bennett

2008 Jul 28 10:59 PM

[PT1959:]

Aalan - You really should do your homework BEFORE you spout off about a company. Boeing is not only NOT in debt, but they made over 4 billion in profit in 2007 and are sitting on almost 350 billion in backlog. The market for commercial aircraft isn't dead as most of the new orders in the last several years are from foreign companies that have booming economies. China currently has no capability to produce aircraft for over 100 passengers and although they plan to develop this capability it will take decades and many billions of dollars.

2008 Jul 30 06:07 AM

[Norman Lepo...:]

Interesting article. Thanks.

2008 Jul 30 09:07 AM

[wee:]

Here's my two cents: BA no way, they remind me of airlines. NEM will fall when oil and gold descend together. AMSC, own it. ZOLT for long, long position. And RIG is looking good on paper but to suggest that they will have their day is somewhat dependent on increased offshore drilling.

2008 Aug 03 07:47 AM

[x-TO:]

Transocean (RIG) is NOT a US company. It is incorporated in the Cayman Islands, see query.nytimes.com/gst/...

2008 Aug 12 05:25 AM