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Wind Stock Winners: Amer. Superconductor

Shares of wind energy stock American Superconductor surge on an upgrade. Is it time to call a trough point in the weak wind market demand?

DEVENS, Mass. (


) -- Shares of wind energy market supplier

American Superconductor

(AMSC) - Get American Superconductor Corporation Report

are churning on Thursday after an upgrade from Deutsche Bank Securities, from a hold to a buy.

American Superconductors shares were up more than 9% on Thursday morning and the wind energy company was already at its average daily volume of shares traded before the midday mark.

It has been a rocky ride for wind stocks in 2010, with weak demand in the wind sector -- both in the U.S. and China -- depressing stocks in the sector.

Shares of American Superconductor were trading near a 52-week high in early January, at $41 per share, but fell as low as $25 per share in late March. With Thursday morning's rally on the Deutsche Bank upgrade, American Superconductor shares were back above the $31 mark, a share price level that American Superconductor had declined from steadily since early March.

Deutsche raised its price target on American Superconductor shares to $38.

Does the Deutsche upgrade indicate that the trough point in the wind sector has been reached?

Earlier this year, shares of U.S. wind turbine company

Broadwind Energy

(BWEN) - Get Broadwind, Inc. Report

received a big vote of confidence from JPMorgan Chase, when it rated Broadwind a buy and downgraded solar stocks alongside the bet on wind.

Investors should hope the timing of the Deutsche upgrade is

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better than the timing of the JPMorgan call on Broadwind.

Broadwind shares plummeted after its management team said demand would reach its low point in the first half of 2010.

Broadwind Energy is dependent on a rebound in the U.S. wind market, and its shares remain depressed after its weak outlook.

The Broadwind management 2010 outlook was provided in an earnings report that was released within a week of the JPMorgan buy rating. American Superconductor hasn't released a date for its next earnings report, but last reported third quarter 2009 earnings on Feb. 2. In the week following its last earnings report, American Superconductor shares fell almost $10.

American Superconductor shares were also

pestered by a research report that presented a pessimistic outlook for the wind energy and semiconductor company.

The big distinction between Broadwind and American Superconductor resides in their respective markets -- the U.S. for Broadwind, versus China for American Superconductor.

This isn't the first recent rally day for American Semiconductor, though, and alternative energy stocks tend to be volatile.

American Semiconductor shares also rallied in late March when it announced new contract awards in its primary market of China and with its biggest Chinese customer, Sinovel.

The demand profile of the wind market remains an uncertainty and Street forecasts remain guesswork.

When China's

A-Power Energy Generation Systems


recently reported earnings,

A-Power's actual revenues were at almost half the level of Street estimates, and the big shortfall was in the wind market's forecasted growth versus the actual level of wind market demand.

A-Power shares were up 3% on Thursday, but still well below the share price at which the A-Power shares were trading before the March-end weak earnings report.

For A-Power and American Superconductor, which both sell into China, there was a positive glimmer of news from Reuters, which reported on Thursday that electricity output from wind farms in China surged 87.5% in March, half of the generation level of nuclear plants.

-- Reported by Eric Rosenbaum in New York.


>>Wind Winners: American Superconductor

>>Alternative Energy Winners: A-Power

>>Solar: Off the Ropes and Fighting Back

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