NEW YORK, Dec 12 (Reuters) - Shares of American Superconductor (AMSC.O) appear overvalued because too much of its business relies on one Chinese customer, Barron’s said in its Dec. 13 edition.
American Superconductor, whose shares closed at $33.48 on Friday, supplies generators to China’s leading maker of wind turbines, Sinovel Wind Group, which accounts for some 80 percent of American Superconductor’s sales.
But Sinovel’s inventories are rising because the company has been producing more turbines than it ships, as China’s boom in wind power slows, Barron’s said. Some wind farms stand idle because they are not yet connected to the electrical grid.
The risk of Sinovel cutting production, and purchases from American Superconductor, are not fully priced into the company’s shares, the investment weekly said.
Reporting by Nick Zieminski; Editing by Diane Craft