Original post:
In early pre-market trade the stock is up $.70 at $26.14.
From Notable Calls:
Jefferies is upgrading American Superconductor (NASDAQ:AMSC) to Buy from Hold with a $35 price target (unch) saying they view the current level of AMSC's stock price as a buying opportunity. The stock has been pressured since late CY'09 from a variety of issues including mgt maintaining FY'10 guidance against lofty expectations and concerns about a potential shake-out of the wind industry in China. They continue to like the story's operational momentum and leverage to Chinese wind growth. On a risk-return basis the firm believes the stock is trading lower than fair value.
Bear case unlikely, in Jefferie's view. Recent press reports have raised fears that gov't efforts to force a shake-out in turbine manufacturing will slow Chinese wind installations. Yet, China appears committed to rapid growth in wind having raised its target to 150 GW of installations by 2020 (from 25 GW today). In fact, efforts to restrict capital deployment in the sector appear targeted towards a glut of under-capitalized new entrants with limited technological expertise, not the industry leaders AMSC has signed development contracts and orders with. While AMSC does face a rev concentration risk (Sinovel makes up the majority of revs), it is also gaining traction with new customers, some from outside China, such as Hyundai
Heavy Industries, which plans to export turbines for the US mkt....MORENotablecalls: When you have 'potential guidance raise' & 'Sinovel orders' in one note (ok, two notes), you're looking at AMSC up 6-8%, with $28+ level in play.
It's become a hated stock, mostly thanks to Citron Research touting the short thesis on the name, it looks good for a buy. A trade, if you will. There's a 26% short interest.
btw, I think the Street missed the Sinovel news yesterday.
