American Superconductor Corporation (AMSC) serves wind energy, power transmission and distribution markets in North America, Europe, and Asia. The company offers a range of solutions based on two technologies: programmable power electronic converters and high temperature superconductor [HTS] wires. American Superconductor has strategic alliances with GE Energy, Nexans, Siemens AG, Southwire, Vestas, and Northrop Grumman Marine Systems. The company was founded in 1987 and is headquartered in Westborough, Massachusetts.
The company has good fundamentals with strong sales growth and expanding operating margins. Revenues for the second quarter of fiscal 2008 were a record $40.4 million, an 87 percent increase from $21.6 million in revenues for the second quarter of fiscal 2007. Gross margin for the second quarter of fiscal 2008 was 26.5 percent, which compares with 26.0 percent for the second quarter of fiscal 2007.
AMSC generated a positive $0.3 million in cash from operations for the second quarter of fiscal 2008. Cash, cash equivalents, marketable securities and restricted cash at September 30, 2008 were $128.9 million, a decrease of $2.6 million from $131.5 million at June 30, 2008. Nearly $2 million of this sequential decrease is due to a foreign exchange-related revaluation of euro-denominated cash balances.
Net income for the third quarter of 2008 increased 40 percent to $8.1 million versus $5.8 million in the third quarter of 2007. Fully diluted net earnings per common share were $0.34 in the third quarter of 2008 versus $0.24 in the third quarter of 2007.
The stock is showing a potential Elliot Wave-5 buy, projecting gains into the $17.28 per share area over the next few months. American Superconductor does have an options market that currently extends out to January of 2011 allowing the options strategist enough time to take advantage of the forecasted opportunity.
Figure 1: Daily Elliott Wave-5 Buy Pattern for American Superconductor
(Source: Profit Source)
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Jeff Neal
Senior Writer, Options Strategist & Profit Strategies Radio Show Market Correspondent
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