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Midday Market Minute: Average 401k Balance Reaches Record High"American Superconductor (NASDAQ: AMSC) should benefit from an update of the nation's power grid," says Jim Powell.
Here, the editor of Global Changes & Opportunities Report reviews this leading manufacturer of more efficient high temperature superconductor-based wires and cables.
"I've been writing about infrastructure stocks ever since it became apparent that big federal spending programs were on the way. I believe American Superconductor will perform very well. In fact, its price has already started to rise.
"American Superconductor is not yet profitable. However, the company is well past the development stage. AMSC makes high temperature superconductor (HTS) wires and cables that carry as much as 150 times the current as conventional products of the same weight and diameter.
"Because it is more efficient, HTS is also more cost effective than conventional systems. AMSC also makes superconducting motors and associated controllers for marine and industrial applications.
"Because the motors are smaller and much lighter than comparable equipment, they are receiving a good reception. For example, cruse ship companies are becoming important customers because they are committed to electrical propulsion. The military expects to do so over the next decade.
"I believe railroads and inland waterway companies will also adopt the efficient new technology. As energy prices move back up, the economic benefits of superconducting systems will increase.
"Even more promising is the company's rapid expansion into the wind power industry. AMSC makes power controllers that automatically adjust a turbine's electrical system to different wind speeds.
"The company also makes lightweight generators that are ideal for use on towers. AMSC has become so successful in the wind power industry, it started Windtec, a specialized engineering group that serves the industry. This operation has great potential.
"American Superconductor looks particularly attractive at this time because the company's second generation technology is now available. The new systems should open many additional markets. China, for example, just ordered 100 sets of the company's wind turbine products."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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