We want a stock like Itron. The dominant player in smart grid; which is the smart grid transformation. When some huge, moldy company talks about how great the smart grid is like GE did Friday and IBM did on Thursday, you go take a look at Itron, because it can actually move the needle for this stock. Smart meters have been the easiest change to get regulatory help to achieve quantifiable energy savings. Smart meters remotely connect to you and read your power meter…
Itron's the best way to play it. I was wrong on it before. I recommended it back on April 22nd of 2008 at $100. It was a green week play. I got that wrong because it's down over 43%. We were caught up. We made a mistake. But now that the Obama Administration's pushing for the timing on this one's going to be just right…
…Whereas GE is a $170 billion company with its hands in just about everything, Itron is a $2 billion company that is all about smart meters. Which means the smart grid really moves the needle for this stock. Itron has a huge customer base with advanced metering infrastructure, smart meters and advanced meters reading. Slightly less smart readers that still require people to go out in the field and collect deployments to more than 8,000 utility customers in 130 different countries in around the world, companies that have some major smart wins.
…How about a $260 million contract with San Diego Gas and Elec for 2.3 million electric and gas meters running from 2009 through 2011? Itron has broad geographic exposure. 60% to 70% of its sales come from outside the U.S. that means it's also a big beneficiary of the weak dollar. Itron trades at only 14 times 2011 earnings. I think it's pretty reasonable given the stock's projected growth rate of 26% from 2010 to 2011. Thomas Weisel just downgraded Itron based on the valuation, they think the stock's run up too much. But it's still down 11% year to date, I think it has room to run given it's the top player in a that's still in its early stages. When a big multi-business company like GE says positive things about a major theme like the smart grid on its conference call we step back, find a pure play Itron. Smart grid doesn't just move the needle for Itron.
