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5/1/07
Xantrex Technology: A Small but Bright Light for your Portfolio
Tuesday, May 1, 2007
If you don't mind risk and if you are willing to buy a small cap stock that trades thinly, then Xantrex Technology Inc. (TSX:XTX)
could be a good one for you. This Canadian power solutions company is
an international leader in the manufacture and distribution of devices
that convert different types of electricity into the kind of power that
can be used by modern electrical devices.
As we enter the age of increasing renewable power, Xantrex's products will be in increasing demand, and I think this is a company with enormous potential. I learned about Xantrex from utility and energy experts within the industry. When insiders know of something good, it's only a matter of time before it gets wider attention. In this case, I think the creme really will rise to the top.
The last couple months alone show why Xantrex's star may be rising. At the end of April, XTX received a major contract to develop solar inverters as part of the US government's "Solar Nation" Initiative. In March, the company signed another major deal with Shanghai Electric to provide renewable energy solutions, and yet another with Duracell, to provide portable energy solutions for rechargeable devices. In other words, the company is servicing demand in some of the most rapidly growing areas: Renewables, China, and portable devices that are crucial to our information age.
2006 saw Xantrex's results improve significantly, with revenues up 14% and operating income also way up after a rough 2005. The company has forecast similar growth for 2007, which seems feasible given these recent deals as well as XTX's recent acquisition of Elgar Energy. We'll see the first signs when XTX announces its first-quarter results on May 1.
This isn't a company where I'd take a large position, given that it's harder to get in and out of a stock that trades "by appointment." Plus, the stock price has been pretty stagnant for the past couple years. But if you can take a modest risk, I think there's a great deal of upside here.
Type of stock: A small and very under-the-radar Canadian electric power solutions company that may be on the cusp of real growth.
Price target: Currently around $10 (Canadian) XTX has been rising modestly since the beginning of the year. I'd buy while it's still below $12 and hold on for at least 18 months. This is risky, of course, but I think that Xantrex could reach $25 by the end of the end of the year.
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Xantrex Technology: A Small but Bright Light for your Portfolio
As we enter the age of increasing renewable power, Xantrex's products will be in increasing demand, and I think this is a company with enormous potential. I learned about Xantrex from utility and energy experts within the industry. When insiders know of something good, it's only a matter of time before it gets wider attention. In this case, I think the creme really will rise to the top.
The last couple months alone show why Xantrex's star may be rising. At the end of April, XTX received a major contract to develop solar inverters as part of the US government's "Solar Nation" Initiative. In March, the company signed another major deal with Shanghai Electric to provide renewable energy solutions, and yet another with Duracell, to provide portable energy solutions for rechargeable devices. In other words, the company is servicing demand in some of the most rapidly growing areas: Renewables, China, and portable devices that are crucial to our information age.
2006 saw Xantrex's results improve significantly, with revenues up 14% and operating income also way up after a rough 2005. The company has forecast similar growth for 2007, which seems feasible given these recent deals as well as XTX's recent acquisition of Elgar Energy. We'll see the first signs when XTX announces its first-quarter results on May 1.
This isn't a company where I'd take a large position, given that it's harder to get in and out of a stock that trades "by appointment." Plus, the stock price has been pretty stagnant for the past couple years. But if you can take a modest risk, I think there's a great deal of upside here.
Type of stock: A small and very under-the-radar Canadian electric power solutions company that may be on the cusp of real growth.
Price target: Currently around $10 (Canadian) XTX has been rising modestly since the beginning of the year. I'd buy while it's still below $12 and hold on for at least 18 months. This is risky, of course, but I think that Xantrex could reach $25 by the end of the end of the year.
hilaryonstocks at 2:07:00 PM EDT Blog about this entry |
Add to del.icio.us | digg this
5/1/07 2:33 PM