When most people think of technology in energy, they think mainly of companies in the alternative energy space. There have been some amazing advances in solar and wind power, and particularly in producing usable vehicles powered by batteries rather than gasoline, over the last decade or so.
Demand reduction obviously reduces emissions, but reducing the amount of electricity required on a day-to-day basis also makes the switch to the less efficient alternative energy sources more viable. Governments, who aren’t typically known for their flexibility, are slowly coming to realize that, and are increasingly supporting and subsidizing metering and demand reduction efforts as a result.
However, even though this is an area of rapidly evolving technology, it is not one where new companies have an edge. Existing relationships with utilities and authorities and a proven track record are important, so if you are looking for a way to play the trend as an investor, it is best to look for established companies where greater adoption and utilization is a growth opportunity rather than a necessity. Itron is a case in point.
In some ways, that has been reflected in the performance of ITRI over the last year. The stock hit a low just below $40 after releasing earnings a year ago, then began a strong, sustained recovery that saw it hit $79.99 last month. Then, following a cautious outlook that accompanied a top and bottom line beat in their Q2 earnings, the stock started to pull back and now, at below $65, represents value.