“Electrifying Boost on July 26”

Just about two weeks left to take advantage of this teaser, if indeed it’s any good. It comes in from Mark Skousen’s Hedge Fund Trader, and the solution was sent in by an alert reader almost as soon as the email started to circulate.

“This World-Class Company’s Stock is About to Get an Electrifying Profit Boost on July 26. “

That’s the date the company releases earnings, and Skousen expects something pretty remarkable, I gather. And he’ll tell you all about it for a thousand bucks a year, which sounds like more than I want to pay for the name of this company.

So what does he tell us about the company?

“Based in Switzerland, this company is the world’s biggest supplier of power networks and a world leader in automation. They operate in more than 100 countries and employ over 115,000 people.”

“they are #1 or #2 in virtually every business line in which they compete.”

“Since mid-May they have been able to secure 11 contracts with values of over $25 million. And two of the 11 contracts are worth over $120 million.”

So … that’s probably enough clues to identify this company (as indeed my reader did, with no problem)

And it seems worth it to sniff this one out — as Skousen says, power generation and power networks are hugely in demand in the developed world thanks to a few decades of underinvestment, and in the developing world the race to build power supplies is just underway.

Of course, it’s also true that the infrastructure stocks have seen a remarkable run recently, so it would indeed have to be an outsize surprise to get them moving — this is far from an undiscovered sector of late.

But I digress — you just want the name of this company so you can go off and do your research before July 26, eh?

This Swiss power giant is …

ABB Ltd. (ABB), formerly known as Asea Brown Boveri.

This is essentially a massive electrical engineering company, with big electrical infrastructure projects always underway around the world. A great company and a huge one, with a $50 billion market cap already.

Now, Skousen may be right about this, it might be a “fairy tale profit explosion” waiting to happen — I certainly have no idea — but the shares are already trading at a trailing PE of over 30 with clearly some significant growth priced in (forward PE estimates are near 20, still a significant premium to the market and their sales growth ,though earnings growth has been big very recently).

I hesitate to expect a big pop from a large cap stock that already has big growth predictions built in, but other than a little trepidation about the valuation I can’t think of anything bad to say about ABB. It has gotten lots of attention this year, including some push from Jim Cramer and others if I remember correctly, so perhaps some of you already own shares in this one — if so, let us know why you like it and why you think growth will outpace predictions.

Happy Investing, all … hope you’re staying cool on what is a brutally hot day for us in the mid-Atlantic.

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2 Comments on "“Electrifying Boost on July 26”"


July 9, 2007 10:22 pm

Hi….yes, I bought into this company last July at $12.41, so you might say I have doubled my $$ according to the current price of $24.
I work for a large global utility company and I know there is money to be made….esp. by ABB since they are a huge company and do business worldwide. I can’t say the stock will ‘leap up’, but it will definately grow steadly with todays worlds demands for electric power and equipment.
It does pay a cash dividend and just started last May at .09 cents and again this year up to .19.5cents.

July 15, 2007 4:23 pm

I am holding calls on ABB that I purchased on 6/19/07 based upon an earlier recommendation from the author of the teaser. The are up 115% so far. Will hoding trhough earning, a practice that I do not normally do.