"I'm adding Itron (NSDQ: ITRI) to my diversified portfolio of stocks in the alternative energy space," says Elliott Gue.
In The Energy Strategist he explains, "The firm will benefit from both the HR 2454 bill (a cap-and-trade system designed to reduce U.S. greenhouse gas emissions) and the stimulus bill which included direct subsidies aimed at promoting efficiency and building a more intelligent electric grid.
"Itron is a leading play on energy efficiency and smart grid technologies, a key, near-term component of cutting carbon emissions.
"Itron is already a leader in automatic meters. Traditional gas and electric meters require a utility technician to manually read each display in each home and business.
"Automatic meters, however, transmit data via a radio signal directly to technicians, accelerating the meter reading process and cutting costs for utilities.
"Itron has a 50% market share for automatic meters in the U.S. and close to a third globally. Smart meters are the next step.
"These meters will not only transmit data about how much energy a residence or business uses but also valuable data about how energy is used. This information can be used to cut costs and enhance efficiency.
"For example, businesses could benefit from performing certain energy-intensive tasks at off-peak hours when total demand for power is low.
"Data from smart meters could be used to identify those potential savings or even to automatically manage power demand.
"The European Union (EU) recently passed a mandate to upgrade the majority of meters to more advanced automatic and smart meters, a policy that should juice Itron's revenues. Meanwhile, HR 2454 is likely to help accelerate investments in smart meters in the U.S. as well. Buy Itron."
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