Keith Richards Powell Industries POWL-Q HOLD Dec 20, 2024

Profitable and in the right sector, infrastructure.

Has soared from $20 in late-September 2022 to $171 today. An industrial company that makes electricity-related equipment, geared to oil and gas companies (including pipelines and refineries), but they're growing because of new end-users in utilities, transportation, metal, mining and data centres. Big growth since last year, 31% revenue growth. EPS nearly quadrupled in 2023 as orders grew 94% and they saw a backlog of 118%. The street has been under-estimating them, so they have been beating their quarters huge.

They've become the go-to to obtain critical electric infrastructure. It's a terrific data centre play. Is up 259% this year.

Good-looking chart. Big picture shows an uptrend. Chart shows consolidation in early 2024 after its parabolic move. But again, it's now gone a little too high too fast. He believes it will take a break, and you can use that as a chance to buy if you like the company's prospects.

Had a great run-up last year, but has slid this year. Why? Has strong fundamentals, positive analysts coverage and low valuation. It soared when data centres were hot, but is sliding when they're not. The actual business is doing well: a healthy backlog of $1.3 billion and $269 million of new orders, and excellent earnings. Sales and earnings have slowed from last year's insanely high levels. Still boasts mid-20s revenue growth and mid-40s earnings growth. The selling is overdone.

Anything data centres is out of favour like this. Data centres are slowing down, though the stock is cheap.