Power play: Rebuilding the electric power grid

"With more than 17,000 employees, offices in 40 states, and long-term relationships with sub-contractors, they have the resources to complete projects anywhere in North America.

"A typical project is one just awarded to them by Oklahoma Gas and Electric for the construction of approximately 120 miles of 345,000 volt transmission infrastructure just outside of Oklahoma City.

"This $4.1 billion market cap company is only 12 years old. Their rapid growth has been fueled by the new demand created when the aging power grid met deregulation. Rapid revenue growth, strong profits, and low debt have been a winning combination for PWR.

"For the last 3 quarters, revenue has grown at 48%, 74%, and 61% compared with the same quarter in the prior year. Over the same 3 quarters, EPS has grown at 29%, 44%, and 39%. Debt is only 7% of equity. Most of their revenue (57%) comes from services to the electric power industry.

"In addition to the opportunities that will come from the economic stimulus package, there is a large deal in the works to build new transmission lines to connect the growing number of wind farms in Texas to the grid.

"It is estimated that it will take approximately $5 billion and 2,400 miles of additional transmission infrastructure for this project. PWR, based in Houston, ought to be in an ideal position to get a large piece of this pie.

"The 10-year chart shows that PWR has performed well in the past, but has been beaten down by the recent bear market. Recent performance indicates a bullish cup with a handle pattern.

"The handle is formed when the final group of weak holders sell after an uptrend. In theory, this leaves only strong holders owning the stock, and the price should rise due to a lack of selling pressure."

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.