American Superconductor Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of electric power infrastructure specialist American Superconductor (Nasdaq: AMSC  ) climbed as high as 11% in intraday trading Tuesday after its quarterly results and full-year outlook topped Wall Street expectations.  

So what: Driven largely by a 46% sales jump at its power-systems segment, AMSC posted third-quarter earnings of $0.40 per share, versus the average analyst estimate of $0.33 per share. Additionally, AMSC upped its full-year profit outlook for the third time, to a range of $1.33-$1.38 per share. It also announced plans to reduce its reliance on Chinese wind power company Sinovel, which accounted for about 70% of third-quarter sales.

Now what: Even with today's pop, AMSC might be worth looking into. In addition to the positive short-term outlook, management expects those renewable energy tailwinds from Asia to grow its top line to $1 billion, and expand its operating margins to more than 20% by 2014 -- one full year ahead of schedule. And with AMSC's PEG ratio of 0.6, representing a clear discount to rivals ABB (NYSE: ABB  ) and Woodward (NYSE: WWD  ) , you won't need to pay too high of a price for those prospects.

Interested in more info on AMSC? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. ABB is a Motley Fool Global Gains pick. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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