Telvent (TLVT) Should Have E-ZPass Into Investors Portfolio - Barron's

E-ZPass is a familiar system in the New York and Maryland area, allowing user to prepay to save time at toll booths. The system mounts a tag inside the users car, and a scanner scans [what we assume is an RFID unit], checks the account balance, and then allows passage.

Considering that, and the fact that millions of people use it everyday, Telvent GIT (NASDAQ: TLVT) isn't easy to pass up on, a Barron's article reports today.

An obscure green technology play, Telvent's bread and butter is transportation-services that reduces traffic buildup, thereby eliminating unnecessary congestion and pollution. Telvent also provides oil and natural gas companies with transmission monitoring systems.

TLVT trades for just about 10x FY11 EPS estimates, making it one of the cheaper plays in the "smart grid" technology sector. Other companies in this segment include Itron (NASDAQ: ITRI), Echelon (NASDAQ: ELON), Quanta Services (NYSE: PWR), and ABB Ltd. (NYSE: ABB).

Piper Jaffray believes that TLVT could trade at 13x FY11 EPS estimates with solid company performance and secular growth opportunities in end markets. They say that most other smart grid plays trade at 19 - 21x EPS estimates, making Telvent look cheap in comparison.

The company's smart grid technology is expected to see 15 - 20% in top-line growth for 2009.

Population growth in cities is a superior growth area for TLVT as infrastructure becomes more congested and inadequate.

Adding intelligence helps protect power grid networks against terrorist attacks, which may become a juicer target in the coming years.

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