American Superconductor (AMSC) took a hit from Barron’s over the weekend and a hit to its stock price Monday as a result with the stock down 8%. Barron’s believes the company relies too much on a single customer. That single customer happens to be Sinovel which is the largest wind turbine producer in China, but Barron’s is concerned about the risk involved with signs that the boom in China wind power is slowing while AMSC’s valuation remains sky high.
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Barron’s notes that inventories of wind turbines are increasing and prices are dropping and Sinovel is no exception, which provides 80% of AMSC’s revenue. The image from Sinovel’s prospectus (company preparing to go public) highlights the trend of producing more than it sells and rising inventories.
![[wind_c_bars]](https://barrons.wsj.net/public/resources/images/BA-AU485_wind_c_NS_20101210194402.gif)
Shares of AMSC are down a bit more this morning and testing an important area of support around the 200 day moving average. If AMSC can’t hold the $30 level in the coming days, we could very well see retest of the lows of 2010 around the $24 level.
I wonder how many shares of AMSC the folks at Barron’s picked up after throwing out that sabatoge bomb.
AMSC’s greatest asset will prove to be its ‘Amperium’ – superconducting wire. If the “oracles” at Barron’s can see this they have no business making public anouncements about
valuable technology stocks.