Is Itron (ITRI) On Its Way To Its 52-Week High?

Itron (Nasdaq: ITRI), which makes smart electric meters--the kind that lets utilities give you a discount if you run your dryer at night, when power is cheaper. Boy, if the economy continues to slow, I'd bet people and utility companies would love to take advantage of this service.

Itron is currently trading at $84.65, down from its 52-week high of $112.92. Itron shares fell after it reported lower than expected 3rd quarter numbers. However, Itron has been back on the rise after winning contracts with various utility companies and potentially more to come. Itron has shown support and has stayed in the high 80s range during the market drop, suggesting there is some money in on this one.

Itron recently won a $480 million contract with Southern California Edison which should continue to support growth. RBC Capital analyst, Stuart Bush, upgraded Itron to "Outperform" from "Sector Perform" and raised his price target from $80 to $105.

He also said: "We believe Itron's selection for the ... project gives the company momentum with a major reference customer for success at other utility request-for-proposals and at margins that were seemingly not as discounted as we had expected for initial projects," Bush said in a client note.

The stock trades at 24 times next years earnings estimate. Although, some may consider that high, the price is more than justified given the PEG is below 1. I expect Itron to have earnings growth of about 29% in the next 5 years.

Forbes, Lisa Hess, said earlier in 2007, her best suggestion was Itron and she still thinks green-oriented companies are in favor and you should continue to hold this one. I, as well, expect Itron to perform very well in '08 and to have a strong upcoming quarter. As I said earlier, consumers and utility companies looking to save money and be green will continue to take a closer look at Itron.

Itron will release earnings for the three months and year ending December 31, 2007, after the market closes on Wednesday, February 20, 2008.

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