Nancy's Power Play

12/05/2003 12:00 am EST

Focus:

Nancy Zambell

Editor, Wall Street's Best Investments and Wall Street's Best Dividend Stocks

Nancy Zambell focuses on fundamentals, searching for high-quality, well-run companies that are growing their revenues consistently. She seeks companies on the verge of a breakthrough that will act as a catalyst toward rising earnings and increased attention from Wall Street. Her latest is a "Power" play.

"August 14, 2003 was the worst power blackout in US history. Fortunately, failures of this magnitude don't happen very often. American Power Conversion (APCC NASDAQ) is the global leader in power availability solutions. Started in 1981 by three MIT engineers, American Power is one of fewer than 10 companies in the world that offer a full range of uninterrupted power supply (UPS) products. The company sells into nearly 120 countries. Its products range from surge protectors designed for the home or small office environment to products that keep the largest computer rooms and data centers safe from power interruptions.

"For the first nine months of the year, revenues were up 10%, to $1.03 billion. Net income rose 35%. Third-quarter earnings rose 33%, beating the pants off analysts' estimates. American Power has plenty of room to grow. With its strong financial position, its global operations, and its constant innovation, the sky is the limit for this company. We're setting our initial target at $32, a 46% gain. The company has an excellent track record of expanding sales and earnings. It has good insider ownership of shares—14.6% of outstanding shares are in the hands of the people who run the company. And it is undiscovered. Just a few major analysts cover the stock. We recommend APCC up to $24."

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