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Strategies & Market Trends : Buffettology -- Ignore unavailable to you. Want to Upgrade?

To: James Clarke who wrote (2528)	6/15/2000 8:44:00 PM
From: jhg_in_kc	Read Replies (2) \| Respond to of 4690

James, why don't you take a look at this unglamorous, unhyped stock that supplies the juice (powersupply) for the pick-axe and shovel-makers in the Internet gold rush. Look at its chart this spring, no downside at all to speak of. My latest enthusiasm, "the Cisco of the Power supply industry," PWER. <<, these guys are supplying the best steel for the shovels in the internet, wireless gold rush (so far)...Stephens Inc. Morning Research Notes June 15, 2000 COMPANIES MENTIONED IN THIS REPORT: PWER ____________________________________________________________________________________ POWER-ONE FYDec. CEPS Prior Est. PWER ? $79.25 Rating: BUY 99A $0.60 Price Target (12 mo.): $87.00 00E 1.38 NC Todd Cooper (501) 377-2503 01E 2.05 NC Report From the Powercosm Conference ? Power-One?s management presented and participated on two panels yesterday at the Powercosm? Conference in San Diego. The term Powercosm was coined by George Gilder and his associates to describe the changes occurring in the area of electrical power technology. The changes that are occurring are truly revolutionary and offer the astute investor the potential for exceptional returns not unlike those that have been experienced in the communications revolution. Gilder Publishing is sponsoring the conference and has labeled Power-One as the Cisco (CSCO - $65.19) of the Powercosm. ? Of note to us was a projection of the growth of the dc/dc converter market for the telecommunications space that was provided by PWER and endorsed by other industry experts. Today, it is estimated that the market for telecom dc/dc converters is approximately $1.0 billion. It is the consensus opinion that this market will grow to $6.0 billion in just three short years. ? This staggering growth of this market segment should positively impact PWER?s two fastest growing product lines: dc/dc converters and telecom dc power plants. ? Since acquiring International Power Devices (IPD) in January 1999, IPD?s dc/dc converter business has grown significantly faster than the market. We believe that this trend will continue over the next three years. In September of last year when we visited PWER?s Mexico manufacturing facility where the converters are made, the Company had three SMT manufacturing lines. Today, PWER has in place, or on order, ten SMT lines. Each line is capable or producing between $40 million to $50 million per year in revenue. ? Demand for the telecom dc power plant product lines that were recently added with the acquisitions of HC Power and Powec should also grow as a result of the anticipated dc/dc converter growth. The telecom power plants provide the regulated 48 volt dc bus that power the equipment found in telecom central offices and other telecom installations. This equipment (routers, optical switches, lasers, etc.) that utilizes distributed power architecture is what is driving the demand for the dc/dc converters. As the demand for dc/dc converters grows, so too grows the demand for the telecom dc power plants. We reiterate our BUY recommendation. Stephens Inc. maintains a market in the common stock of Power-One and may act as principal in these transactions. An officer/director/employee of Stephens Inc. is a director of Power-One. Stephens Inc. has managed or co-managed an underwriting within the past three years for Power-One. Affiliates of Stephens Inc. own a substantial percentage of the outstanding common stock of Power-One.