Monday, December 14, 2009

Bookkeeping: Restarting Stakes in Insituform Technologies (INSU) and American Superconductor (AMSC)

I am going to restart smallish stakes in 2 companies we've previously owned. 

We mentioned American Superconductor (AMSC) last week but a longer version of what the company is about is here.  [Jun 10, 2008: American Superconductor (AMSC) with $450 Million Follow up Order from China]  Much like A-Power Energy (APWR) it is getting a lot of "green energy" hype and the speculators are running in almost daily.  Those 2 names were 2/3rds of my "alternative energy basket" in 2008.

Technically, it has broken above and thus far held its double top from September 2009, so we will venture in although gingerly at first with about a 0.6% exposure, in the upper $38s.  Technical oriented folks call this some sort of "flag"....

AMSC is a leading energy technologies company offering an array of solutions based on two proprietary technologies: programmable power electronic converters and high temperature superconductor (HTS) wires. The company's products, services and system-level solutions enable cleaner, more efficient and more reliable generation, delivery and use of electric power. AMSC is a leader in alternative energy, offering grid interconnection solutions as well as licensed wind energy designs and electrical systems.

Unlike those two stocks, far off the "momo" investor's radar is Insituform Technologies (INSU) - a company we bought in early 2009 [Feb 2, 2009: Bookkeeping - Beginning Insituform Technologies] to take advantage of the coming "infrastructure stimulus" (sound familiar)?  Unfortunately our timing was poor as our luck turned sour - the company announced 2 acquisitions within weeks, and the stock had a massive overhang.  But it has returned to favor now and has in the last week also broken out technically. 

Volume is light at only 200,000 shares a day so it's not as liquid as I prefer but good enough.  I'm starting with a 0.8% stake in the $23.40s, but am willing to add to this one in the near term as it is not as far extended as some other names with good charts.
This contract award last week from the city of Atlanta more or less explains what the core business is:
  • The City of Atlanta’s Department of Watershed Management has awarded Insituform Technologies, Inc. (INSU) two contracts with a combined value of $15.9 million for the rehabilitation of sewer pipes in Atlanta neighborhoods as part of the City’s Clean Water Atlanta Program.
  • The project will rehabilitate over 65,000 feet of small diameter sanitary sewers across the Atlanta area. Work on this project is expected to begin in January 2010 and take approximately fifteen months to complete.
Insituform Technologies, Inc. is a leading worldwide provider of proprietary technologies and services for rehabilitating sewer, water and energy and mining piping systems and the corrosion protection of industrial pipelines.
[Mar 5, 2009: Water Mains are Ticking Time Bombs]
[Feb 25, 2009: Insituform Technologies in Forbes]
[Feb 10, 2009: Insituform Technologies with Favorable Mention in Investor's Business Daily]

I don't find the valuations very compelling in either case, but it's a market that long ago disconnected from fundamentals and now is all about a gush of liquidity with the Bernanke Put firmly behind all risk asset purchases.
Long Insituform Technologies and American Superconductor in fund; no personal position

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