General Electric Company (GE) Is Still an Attractive Wind Play

Be Wary of Small Firms

American Superconductor Corporation (NASDAQ:AMSC) is another company active in the wind energy market, but it is not a good fit for risk-averse investors. The firm started out trying to commercialize superconducting wires. Superconductors are special materials that have no resistance to electricity when they are cooled below a certain point. It is hard to make superconductors economical in large scale applications, because their cooling costs are massive.

American Superconductor Corporation (NASDAQ:AMSC) entered the wind turbine market with a number of controls and software solutions to help improve the operation of wind farms. Recently the company has accused the giant Chinese wind producer Sinovel of stealing some of its software and causing more than $1 billion in damages. It is unclear if American Superconductor Corporation (NASDAQ:AMSC) will be able to recover.

Outside of its wind energy products the company has a slightly more positive future. America Superconductor is building the Tres Amigas superconductor to exchange power between the nation’s fragmented electricity grids. Due to the large amount of power being exchanged, American Superconductor Corporation (NASDAQ:AMSC)’s superconducting wires will be used in the project.

The company’s growing sales of superconducting wire don’t erase its poor financials. Its EBIT margin of -58.9%, return on investment of -49.2% and profit margin of -75.6% are horrendous.

Conclusion

Wind energy is growing, and onshore wind turbines are becoming more efficient. General Electric Company (NYSE:GE) is making wind more attractive to buyers with its latest battery storage system. Siemens AG (NYSE:SI) is another attractive player, but the German company is still fighting to rid itself of Europe’s struggles. American Superconductor Corporation (NASDAQ:AMSC) sounds like an interesting firm with advanced technology, but its recent fight with Sinovel is taking a toll on the company.

The article GE Is Still an Attractive Wind Play originally appeared on Fool.com and is written by Joshua Bondy.

Joshua Bondy has no position in any stocks mentioned. The Motley Fool owns shares of General Electric Company (NYSE:GE). Joshua is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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