Alexander Eule, a Barron’s analyst/reporter, recommended General Cable yesterday, a company that has done timely acquisitions and made smart managerial decisions; it enjoys a broad geographic and product mix:

a. In North America, the company is the largest provider of transmission cables for electric utilities. That puts the company in prime position to benefit from upgrades to the nation’s power grid, following decades of underinvestment.

b. General Cable makes high-voltage wires for electricity transmission, power cables for construction sites, offshore energy platforms and mining operations, and underground fiberoptics.  And, the company has also recently begun providing the underground cables that connect energy-producing wind farms to the main power grid.

c. General Cable’s stock is off 19% in the last 12 months, largely because of the company’s exposure to the U.S. housing market — the company provides much of the wire used to connect electricity to new housing developments.

d. But, the company has managed to beat expectations every quarter for the last two years partly due to to its growing international presence; the U.S. now represents less than 30% of the company’s revenue, while sales from just Brazil, Thailand, Venezuela and South Africa total 14%.

e. According to one hedge fund manager, the company’s current multiple of 11 times 2009 earnings-per-share estimates vastly undervalues the company’s growth prospects: A price-to-earnings ratio of 17 is possible, pushing shares into the mid $90s.

f. Possible negatives include the dwindling market for power cables connecting new residential communities and a surge in raw material costs, copper and aluminum.  But, the company believes it can pass increases in these costs onto customers.

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