American Super: A Forbes Favorite

01/03/2003 12:00 am EST

Focus:

Vahan Janjigian

Editor, Bottom Line's Money Masters Stock Report

The Forbes Growth Investor employs a proprietary system called its “Quant Model,” which conducts a computer analysis of 3,000 stocks each month. Based on this filter, the service isolates the best growth and momentum stocks. This Quant Model has outperformed the S&P 500 by 362% over the past ten+ years. Editor Vahan Janjigian selects American Superconductor as his top pick for 2003.

"American Superconductor (AMSC NASDAQ) was started in 1986 to commercialize high-temperature superconducting (HTS) technologies. In this business, 'high temperature' is a relative term. Ceramic wires must be cooled to 130° Kelvin. That’s about negative 225° Fahrenheit. That’s cold, but not nearly as cold as levels required for low-temperature superconductors. As a result, cheaper liquid nitrogen can be used as the cooling agent instead of more expensive coolants such as liquid helium.

"AMSC has yet to show a profit, but new products are generating a lot of buzz. Its ship propulsion motors are winning favor with the Navy because they are quieter, smaller, and more efficient than conventional motors. AMSC recently started producing high quality HTS wires in commercial quantities. And utility companies find the company’s superconducting magnetic energy storage systems extremely useful for significantly improving power quality.

"General Electric realizes this company’s potential. GE entered into a co-branded marketing effort with AMSC. We believe AMSC could make significant commercial advances in 2003. The general sell-off in technology stocks has brought AMSC to under $4 per share. At this price, it is worth accumulating."

Related Articles on