If you had talked about investing in companies that were plays on basic infrastructure development (roads, power, and water, for example) back in 1999, you would have been laughed out of the room. Everybody wanted one of the two dozen "next" Ciscos, Intels
Funny how times change. Now, folks don't want high-tech; they want old tech. They want companies that sell process-automation equipment or filtration and flow-control products -- companies that will profit from a worldwide spending increase on basic needs like reliable power supplies. That's where ABB
ABB's story is still developing, though I've been a fan of this one since it was a single-digit midget just a year ago. Revenue growth of 5% in this latest quarter may not seem special, but operating income growth of 73% hints at ABB's operating leverage, and the order growth rate of 19% tells me that customers are finally prying open their wallets.
Looking forward a few years, I see a lot of strong demand for ABB's products. If companies like NRG
ABB's certainly not the only game in town. General Electric
I'd really like the chance to get ABB shares below $12, but who knows when or if that will be possible? I certainly think that the shares are undervalued, even at today's price, and your margin-of-safety demands may be less strict than mine. In any case, ABB will remain an interesting global industrial story to watch, as emerging countries build out new infrastructure and developed economies improve their own.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares). Amazon.com is a Motley Fool Stock Advisor pick. The Fool has a disclosure policy.