Stephanie Link, Chief investment strategist, Hightower Eaton Corp. ETN-N BUY Mar 08, 2024

Will continue to own. Electrical components demand demand will remain strong. Ability to generate profits also very strong. Re-shoring of manufacturing will continue, and will also generate profits. 

She bought more. They have 30% market share in their electrical business, which holds exciting growth. So many drivers: utilities needing upgrading, onshoring of supply chains, data centres.

Sells things needed to build power capacity. Future is very good, especially with infrastructure spends around the power grid. Continues to grow double digits.

Electrical components are driving the business. Has done very well. The hype is from the electrical side and AI/data centres. Sold it. Feels it is stretched on the valuation side. Trading at 33x earnings. Expectations for next year and the following year are in the 10% range. Not enough growth versus current price. 

He added shares during Monday's sharp sell-off. They report Friday. It's a fine, long-term story

Sometimes a report doesn't meet expectations, despite being a good quarter. This happened to Eaton.

Can benefit from electrification and selling transmitters and generators. Pulled back, but still not cheap; if that continues, might be worth dipping your toe in.

She trimmed GE Vernoa to buy more Eaton and Quanta Services, and both just reported blow-out quarters. Quanta: EBITDA +40%, backlog +14%. Eaton: data centres +45%, pipeline +65%, and backlog 3x more than normal. Good valuations.

He did well owning this, but sold around 33x PE, too rich. It went higher on momentum, but has sold hard lately. He's looking at it now. A very good company in data centre expansion. Lots of growth, but would buy at a lower PE.

Exciting. Electrical segment key to data centres. Concerns that whole industry may have jumped the gun, and that technology will be obsolete by the time centres are up and running. He's encouraged by its low valuation.