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Smart Grid, Smart Bet? Buyers want to see the smart grid take shape before they'll dive in.

Article Excerpt
Byline: Danielle Fugazy

Sixteen years ago, when John McManus was a senior equity analyst at Needham & Co., he went to visit a then little-known company called Itron Inc. Needham was underwriting Itron's IPO and McManus was conducting due diligence. The company provided automated meter readings (AMR), advanced metering infrastructure (AMI) and meter data management. The general public and most investors, back in 1993, hadn't given much thought to metering technology or the companies that made up the niche.

Today, while the interest of the general public may not yet be piqued, most investors are keenly aware of the metering space. The $4.5 billion that the Obama administration designated as part of the stimulus package toward the establishment of a smart grid means that "smart" meters will be installed in 40 million homes. Moreover, the Department of Energy has increased grant awards to $200 million, representing 10x last year's sum. For Itron, which already takes in roughly $2 billion in revenues, these developments only add to the...