WIRE has been a great winner for those who've held on. WIRE and others are benefitting from a return of manufacturing to the US (reshoring), as well as the resulting need to invest in infrastructure and the electrical grid for an electric world. I've built a portfolio with exposure to these trends, which I think will be in force for the next 5+ years. WIRE, ATKR, ETN, ABB, BDC, NVT, HUBB, BELFB, POWL, TEL, DCI, SSD, PRIM, MRC are some of those companies. My top positions are PLPC and BWMN within these trends.
PLPC has no analyst coverage and trades at a 6.5x trailing EBITDA, where the majority of the companies in their space trade at north of 10x EBITDA. I think it will only be a matter of time before they are discovered and viewed similarly to the other companies in the space. I think fair value for PLPC is closer to $135 today, or 8.5x EBITDA. If they continue to execute over the next 2-3 years, my models suggest they could reach a valuation of $250+ in 2025 with a 9x EBITDA multiple, still below where their comps trade. 40% IRR and 2.5x MOIC from here.
BWMN is my other favorite play which is more tied to all of the engineering that will need to take place to support the investments needed to upgrade infrastructure and the electrical grid and support reshoring. The stock has performed much stronger than I imagined and actually ran away from me a bit as I was building a position in the low $20's. Even here, it appears to be an attractive opportunity. They trade at 8.5x forward EBITDA, which is lower than most of the other engineering comps (NVEE at 14x, TTEC at 16x, Stantec at 13x, ACM at 14x). They're growing both organically and through rolling up smaller engineering practices at lower multiples. I see them as an early version of where NVEE was 5-6 years ago employing the same strategy. NVEE went from $20 to over $125 today over that time frame.
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