"A smart grid makes use of coded signals that travel along power lines, much like DSL broadband messages move through the phone telephone," explains growth stock expert Jim Powell.

In Global Changes & Opportunities Report, he looks at two favorite plays on the development of a smart grid: Esco Technologies (NYSE: ESE) and Quanta Services (NYSE: PWR).

"In a smart grid, the signals allow electric meters to report power consumption automatically to suppliers. At the same time, signals can be sent to customer's appliances such as freezers and refrigerators to prevent them from cycling on and off at the same time.

For some companies, success is based in broad diversification. From utility meter reading equipment to acid filters, video surveillance systems, turntables, acoustic test enclosures and magnetically shielded rooms, there is a St. Louis outfit that has you covered.

ESCO Technologies (NYSE: ESE) supplies special purpose communications systems for electric, gas and water utilities, including hardware and software to support advanced metering applications. In addition, the company provides engineered filtration products to the transportation, health care and process markets worldwide and is an industry leader in RF shielding and electromagnetic compatibility equipment. Customers include Boeing (NYSE: BA) and Lockheed Martin (NYSE: LMT).

The firm pleased investors last week, when it reported fiscal Q2 EPS of 28 cents and revenues of $129.1 million. Analysts had been expecting 23 cents and $125.7 million. Management also guided FY07 EPS to $1.50-$1.65 ($1.52 consensus) and FY07 revenues to $555-$560 million ($552.56M consensus). In discussing the solid results and favorable outlook, the CEO noted growing backlogs. The six month consolidated book-to-bill ratio was 124 percent, with all segments in excess of 100 percent.