Opinions Michael Hakes - CFA, MBA
Hammond Power Solutions Inc.HPS.A.TOBUYDec 01, 2025
Stock price when the opinion was issued
As of Jun 05, 2026. Market Open.
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Ideally suited for expansion of the electrical grid in NA. They make transformers; no matter how the electricity is generated, it has to be transmitted.
Hard to time an entry price, around current levels not too bad (as long as you're willing to give it a few years). Stock's short-term price swings reflect timing of the buildout and deliveries. Its future deliveries look very good.
Michael SprungAI itself is kind of overdone, but there are lots of backdoor ways to play the theme. Great breakout from a base. Angle of ascent on recent move tells that it's overbought. Could theoretically pull back to neckline breakout (somewhere in the $130-140 range), and that's a great place to buy. As long as that holds, it's safe.
If you already own it, he'd keep holding even though there's some potential downside.
Transformers for power generation and storage. Did phenomenally well as the whole electrification of the economy got underway, and that trend isn't going away. Fundamentals have now caught up to the stock, and it looks about to accelerate. New plant is finished. Tailwinds should last for some time.
Reports later this week.
Scores 9 for fundamentals, and 4 for value. The street targets 24% upside. Q2 reported record revenue though gross profit margins dipped due to input costs. Could be vulnerable to rising raw materials costs and supply chain disruptions. They still lead in their industry with a dominant footprint. Data centre demand could be a driver.
Growing demand for energy to build AI will definitely benefit Hammond who make transformers. He said some shares at $150, but is now at a level he would buy for the long term.
(Analysts’ price target is $150.00)
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Premium contentOur PAST TOP PICK with HPS.A has triggered its stop at $113. To remain disciplined, we recommend covering the position at this time. Along with our previous guidance, this will result in a net investment gain of 28%.
Sells for 10x PE, whereas all the big European and US electrical companies sell at 30x. Leading market player in dry transformers. Business will boom with AI. Yield is 0.86%.
(Analysts’ price target is $150.00)
Bruce MurrayThe results were a bit weak on the growth margin side and the backlog decreased a bit. There is huge demand for new data centres and this is good for Hammond Power. He started accumulating it this year. There is a new plant opening up which will be very efficient for electrification demands.
Jamie Murray Premium contentPremium contentPremium contentPremium contentWe reiterate this electric transformer manufacturer, involved in data centre and cloud projects, as a TOP PICK. Recently reported earnings showed a 5% increase in year on year sales and a 17% increase in backlog of orders, which is great timing considering their new production factory is expected to open sooner than expected. It trades at 14x earnings, 3x book and supports a robust 31% ROE. We recommend trailing up the stop (from $70) to $80, looking to achieve $131 -- upside potential of 28%. Yield 1.1%
(Analysts’ price target is $148.25)
Is strongly leveraged to the US data centre build. They supply energy transformers, crucial for those centres.