Hammond Power is a top pick for this fund manager

Sprung Investment Management president Michael Sprung told BNN Bloomberg’s Market Watch on Sept. 23 that Hammond Power Solutions (Hammond Power Solutions Stock Quote, Chart, News, Analysts, Financials TSX:HPS.A) remains well positioned to benefit from rising electricity demand tied to artificial intelligence, data centers, and electrification.

“Hammond Power is definitely one of the companies that’s going to benefit the most because they make transformers, and you don’t move electricity from point A to point B without transformers,” he said. “I think they are extremely well-positioned.”

Sprung said his firm initially bought the stock at much lower levels and trimmed its position after shares rose close to $150, which made it a larger holding than desired. With the stock having settled back, he sees it as attractive again for long-term capital appreciation rather than income.

“You’re certainly not buying this for the dividend,” he said. “You’re buying it for the capital appreciation potential going forward. But I think they will continue to be a key player in providing transformers to the electrical market.”

Hammond Power shares have fallen 19.1% over the past 12 months but gained 1,845% over the past five years. On the Street, all four analysts covering the stock rate it “Buy,” with a consensus target of $150.

Shares closed Sept. 25 at $122.28.

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