Monolith Capital
Equity Research, Niche Market Leaders, Long Growth Runways
Togami Electric is significantly undervalued and could double in the next 24 months as Japan's grid upgrade lifts demand and prices for its electrical distribution equipment. Q1 sales rose 12% and operating profit 40%. The revised guidance looks conservative, with operating income likely 15-20% higher. Cash keeps piling up, now about 28% of market cap, so management should raise its sub-30% dividend payout and accelerate buybacks. x.comÂ
Itron is a grid modernization play priced like a hardware company even though its ARR is growing 20% a year and software and analytics rose 22%, so it should not be valued as hardware for long. It becomes a huge opportunity if SPY drops back to about $662, as buying while everything rallies is unappealing. x.comÂ
Forgent Power Solutions is the highest-upside energy infrastructure stock, a picks-and-shovels play on expanding and upgrading the electrical grid that could be worth $60+ versus about $38 today. @TrackNetWorth counters that grid connection delays will cap the upside before it reaches that target. x.com x.comÂ
EnerSys looks mispriced at about 15x forward earnings versus 23-31x for electrical equipment peers like nVent, Eaton and Hubbell riding the same AI power demand. It has beaten earnings 10 straight times, generated about $717M of free cash flow in 12 months, a near 10% yield, and lifted gross margin over 500 bps to 33.5%. Data center orders rose over 80% and defense revenue 24%. A third of adjusted earnings comes from a US tax credit that phases down after 2030; forklift batteries remain soft. … Show more
Investment in the power grid is being underestimated: annual grid investment is expected to run about $600B through 2030. The best smart-grid plays are Itron in energy resource management, MYR Group in transmission and distribution lines, GE Vernova in grid equipment and Eaton in power management, and none of them looks overvalued. x.comÂ
