A COMPANY IN THE RIGHT PLACE AT THE RIGHT TIME, GROWINTG 100 PER CENT THIS YEAR AND THE NEXT!....
Power-One Up 13%; Co Mentioned On Wall Street Week
Dow Jones Newswires
By Riva Richmond
NEW YORK -- Positive comments on Power-One Inc. (PWER) by money manager Louis Driehaus on Friday's showing of PBS television program Wall Street Week with Louis Rukeyser helped lift the company's stock to a new 52-week high Monday, analysts said.
The Camarillo, Calif., company's stock traded as high as 128 Monday, breaking through its previous ceiling of 112 set on Friday. Power-One retreated recently to trade at 114 11/16, up 7.2% or 7 11/16, on volume of 1.6 million shares, compared with an average daily volume of 835,600.
Power-One designs and makes highly reliable power supplies. Its so-called distributed-power architecture (DPA) is enjoying strong demand from telecommunications, Internet-service-provider and other high-technology companies, which cannot afford power outages that could immobilize their networks.
Driehaus, chief investment officer at Driehaus Capital Management, reportedly highlighted the company as the market leader for this new type of power-supply system.
Driehaus' comments came in the wake of Power-One's appearance at a George Gilder power conference in mid-June that analysts also saw as a recent catalyst for the stock.
"All these things are contributing in real time to (the company's) visibility," said Robertson Stephens analyst J. Keith Dunne.
"And they're performing. Power-One grew 100% last year, they're going to grow 100% this year."
Power-One's growth in revenue, which increased to $205.4 million from $102.5 million last year, has pushed its stock to tremendous gains - its shares are up more than 17 times from its 52-week low of 6 1/2 set Oct. 27, 1999.
"The fundamentals of the business are powering this (stock rise)," said John J. McManus, an analyst at Needham & Co. "The company is the most attractive vehicle, we think, in the whole new power supply system that's occurring in this country."
In a recent note, McManus said Power-One is the fastest growing public power supply company in the world and predicted 100% growth in cash earnings per share over the next two years.
That growth is the fruit of a two-year acquisition binge that helped the company shift its focus to serving telecommunications customers with a full range of ultra-reliable power supply products, said Power-One Chief Executive Steven J. Goldman.
"In 24 months, we've taken the (company's) communications business from 20% of total sales to about 75%," he said. "That has led to the transformation of the company."
Hitching Power-One's wagon to the telecommunications caravan is good business.
Goldman said the total telecommunications power market is worth about $10 billion, with the market for Power-One's product, known as "bricks," or DC/DC converters used primarily in telecommunications applications, worth about $1 billion. He predicts that the bricks' market could rise to as much as $6 billion in the next three to five years. Power-One hopes to hold on to, if not grow, its 10% to 15% market share of that business.
Power-One's customers include Cisco Systems Inc. (CSCO), Nortel Networks Corp. (NT), Nokia Corp. (NOK), L.M. Ericsson Telephone Co. (ERICY), Lucent Technologies Inc. (LU) and Motorola Inc. (MOT).
"These companies will spend a lot of money to get more (power) reliability," said Stephens Inc. Todd Cooper.
The analyst Monday raised his fiscal year 2001 cash earning-per-share estimate to $2.11 from $2.05, arguing Power-One is likely to beat revenue projections now that it has committed to adding manufacturing capacity. Cooper lifted his 12-month price target on the stock to $150 from $87 and reiterated his buy rating.
"Power-One is in the right place at the right time with the right product," he said.
-Riva Richmond; Dow Jones Newswires; 201-938-4046 |
