Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 3
Your 6-month reviews are always enjoyable. Thank you for doing them.

I have been looking at old technology favorites of mine and finding what I think at gems. AMRS and BLPD fall into that category. I looked at FCEL too and added it to my CAPS portfolio (but did not invest money there). My look at AMSC is not positive. I appologize for that in advance...

My last post was in 2013 and I was excited about the Chinese courts getting AMSC payment for the theft of their wind technology. It's now 5 years later and it is a US court ruling in AMSC's favor -- but no cash yet has entered AMSC's bank account. Given all the years since the theft was detected, will AMSC in its current corporate form live long enough to be paid for this significant financial blow?

In 2013 I was worried about AMSC issuing shares instead of making profits and growing organically. A 1-for-10 reverse split took care of the massive number of shares outstanding and the less than a dollar stock price. It is still unclear if AMSC has enough of anything, except a good story (which it always has), to make an ongoing profit organically.

Also of concern in 2013 was AMSC's ability to stay competitive in superconducting. I wrote, "I do not see where they have the funds to stay competitive." I still think that. I also know, by reading phys,org regularly, that many scientists around the world are working on understanding superconductivity. Large investments are being made there and there are products coming to market that require superconducting.

As an aside, this is from Wikipedia about superconducting quantum computing:

Superconducting quantum computing is an implementation of a quantum computer in superconducting electronic circuits. Research in superconducting quantum computing is conducted by Google, Microsoft, IBM, and Intel.

Notice the deep pockets just in this field. Are AMSC's days of competing in superconductors about to end?

Anyone read in the latest quarterly report about the Tres Amigas Project? From Wikipedia:

The project will use superconducting wires from Massachusetts-based American Superconductor Corp for electrical distribution and to interconvert alternating current (AC) and direct current (DC) power.

According to Wikipedia, this is the current status:

In February 2017, it was announced that the project was still progressing but would be significantly scaled back from the previous full project estimate of $1.5 billion to $200 million. The project is also subject to possible relocation due to reduced land needs.

Tres Amigas was proposed in 2009...

Does anyone else chuckle about the Navy and AMSC? This is another long-term love affair that might die of old age. FCEL is installing a land-based fuel cell system at a submarine base in CT. At least FCEL is selling products with part numbers to the Navy and the Navy is going to get experience using that product. Ballard has sold fuel cells to power a being-built passenger/car ferry for NE Scotland that will start testing in 2020.

Also on land FCEL has an operating fuel cell in LA./Long Beach harbor that, besides producing electricity for the port, also produce hydrogen to fuel a Kenworth Class 8 truck. The need to build infrastructure that requires superconducting solutions in order to no tear up roads is being challenged by on-site distributed power systems that have a second benefit -- they can produce hydrogen to power clean transportation.

I listened to the last conference call and looked through the latest AMSC presentation. My conclusion, for now, is that too much time has passed and the current technology portfolio has nice products but with no obvious big winner. With annual sales of $48 million, AMSC is small. Talking about 950 megawatt backlogs is okay but misses the point that sales are not growing like fire.

I'll keep looking here every six months or so but I will be investing elsewhere.

Print the post  


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.