Message Font: Serif | Sans-Serif
 
No. of Recommendations: 22
From the Wall Street Journal today:
Merrill Lynch & Co. started coverage of American Superconductor Corp. (AMSC) with a buy rating.
(A headline published at 9:07 a.m. EST incorrectly referred to the company as American Semiconductor.)


I haven't posted for a while, but I've been reading all of your posts. I was particularly struck by billgru's comment: "[W]e're likely to see continued rough waters ahead for some time. Notwithstanding, nothing will stop this company from being successful providing the product works as expected."

When I first began researching AMSC for the Rule Breaker Seminar, almost a year ago, I read hundreds of posts on various boards. At that time one, from someone whose opinion I have come to respect greatly, stood out. I quoted it in my first TMF post proposing American Superconductor as a Rule Breaker candidate. I just went back and reread it. Since it definitely applies now, I thought some of you might find it interesting and maybe even comforting.

AMSC stock is not fueled by dot.com fever. It is a great technology with great management. One long term investor who called himself "a Wall Street guy, not a technical guy" foresees a price drop and then a steady increase: "I feel the stock could be $400 to $600 in 7 to 9 years. I expect to make several million dollars in this stock. …I do believe the next year or maybe two or three could be rough in the US markets. The momentum players will be crushed before this market gets normal, IMO. This is not legitimate investing." (http://messages.yahoo.com/bbs?action=m&board=7078903&tid=amsc&sid=7078903&mid=1340)

He wrote this at the time most of the tech stocks were flying high. I continued to research AMSC and present my case for it all through the seminar. At the end our team voted to include it as one of our final 6 (later narrowed to 5) companies to submit as Rule Breaker candidates. No other team submitted it.

I have continued to track our team's top 6 choices, for an initial investment in each of approximately $1000. Of the 50 lists submitted from 20,000 participants, 39 teams chose BLDP (#1 for Seminar); 15 chose LHSP (#2 for Seminar); 7 chose PLUG; 3 chose RBAK; 1 (our team) chose JNPR & AMSC. Here is the result thus far:
 # of Shares  Price 3/17   Cost Price 12/30  Current Value
AMSC 24 40.50 $972 22 3/4 $570.00
BLDP 10 95.50 $955 69 1/8 $691.25
JNPR 4 237.50 $950 124 7/8 $499.50
LHSP 8 118.25 $946 Declared Bankruptcy 9/29
PLUG 8 121.00 $968 11 13/16 $ 94.50
RBAK 3 317.00 $951 69 13/16 $190.50

The point of this exercise is that if you look at AMSC in perspective, it has done pretty well against a field of obviously overvalued stocks.

I've been a leader for the last 2 TMF seminars, Rule Maker and Biotech. Biotech is definitely the wave of the future, and investors who choose the right companies will make a killing. But with all the clinical trials, patent expirations, etc., few will survive and actually be profitable.

After thorough DD on numerous companies for the last 3 seminars and for IPO's we could buy into, I was and I am convinced that for LTBH, American Superconductor is a good future Rule Breaker candidate, as I proposed close to a year ago, maybe a little prematurely. It won't begin to reach that status for a few more years, at least until the manufacturing plant for HTS 2nd generation wire is up and running. Reporting on the AMSC Conference Call in August I said, "Yurek explained that American Superconductor's mantra has been that whatever wire technology they chose to pursue, it had to mean high volume, low cost manufacturing of the wire. To that end, the second generation HTS wire should broaden the market dramatically."

Everything I have read confirms that AMSC is still on track, and that Yurek's vision is grounded in reality, not "pie in the sky". He knows his company inside and out, and he has made some valuable strategic moves this year to stay on target. Compare American Superconductor's financial status with companies struggling to stay afloat, and it makes AMSC look even better. Our money was and is on AMSC to survive and flourish.

Judy

DISCLAIMER: We hold a sizable position in AMSC and will continue to do so as LTBH, barring financial collapse of the company, which seems highly unlikey regardless of current Market conditions.
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.