Fund Adds $7.2 Million Powell Stake as the Electrical Supplier Posts Record $181 Million Profit

Miami-based Vision One Management Partners reported a new position in Powell Industries (NASDAQ:POWL), acquiring 23,591 shares valued at approximately $7.2 million during the third quarter, according to an SEC filing on November 14.

What Happened

According to a Securities and Exchange Commission (SEC) filing dated November 14, Vision One Management Partners disclosed a new position in Powell Industries (NASDAQ:POWL). The fund acquired 23,591 shares during the third quarter, establishing a stake valued at $7.2 million as of September 30. This addition represents 4.5% of Vision One’s $158.9 million in reportable U.S. equity holdings.

What Else to Know

Top holdings after the filing:

• NYSE:TNC: $46.21 million (25.4% of AUM)
• NYSE:HXL: $27.55 million (15.1% of AUM)
• NYSE:CC: $27.25 million (15.0% of AUM)
• NYSE:NGVT: $25.27 million (13.9% of AUM)
• NASDAQ:CZR: $17,927,250 (9.8545% of AUM)

As of Friday's market close, shares of Powell Industries were priced at $282.05, roughly flat over the past year and trailing the S&P 500, which is up 11% in the same period.

Company Overview

Company Snapshot

• Powell Industries designs and manufactures custom-engineered electrical equipment and systems, including power control room substations, switchgear, circuit breakers, and monitoring solutions.
• The company generates revenue by delivering integrated electrical distribution, control, and monitoring products, as well as value-added services such as installation, commissioning, and system retrofits.
• Its primary customers operate in oil and gas, petrochemical, LNG, mining, utility, transportation, and heavy industrial sectors globally.

Powell Industries is a leading provider of specialized electrical equipment and systems, serving complex industrial and energy markets worldwide. The company leverages its engineering expertise and broad product portfolio to deliver tailored solutions for mission-critical power distribution and control needs. Its focus on custom design and comprehensive service offerings supports long-term customer relationships and positions it competitively within the electrical equipment industry.

Foolish Take

Long-term investors should view Vision One’s move through the lens of its highly concentrated, owner-oriented strategy: vWhen a fund that typically builds multiyear positions adds a capital-intensive engineering name, it’s signaling conviction not just in near-term demand but in the durability of the underlying business and the potential for change. Powell Industries’ latest results reinforce that point. The company just closed out a record year, with fourth-quarter earnings per share climbing 12% to $4.22 and full-year net income rising 21% to $180.7 million. The firm's backlog remains sizable at $1.4 billion, and Powell continues expanding its footprint in high-growth markets such as electric utilities and data centers.

In this instance, Powell fits neatly into a portfolio built around durable, cash-generating operators. Even with shares roughly flat year over year, Powell’s fundamentals remain strong: fourth-quarter revenue rose 8%, gross margin widened to 31.4%, and the company ended the year with $476 million in cash and short-term investments.

Glossary

13F reportable assets: U.S. equity holdings that institutional investment managers must disclose quarterly to the SEC.

Assets under management (AUM): The total market value of assets a fund or investment manager oversees on behalf of clients.

Stake: The amount of ownership or investment held in a company, typically measured in shares or percentage.

Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.

Forward price-to-earnings ratio: A valuation metric comparing a company’s current share price to its expected future earnings per share.

EV/EBITDA ratio: Enterprise value divided by earnings before interest, taxes, depreciation, and amortization; used to assess company valuation.

Dividend yield: Annual dividends per share divided by the share price, showing the income generated from an investment.

Custom-engineered: Products or systems specifically designed and built to meet unique customer requirements.

Commissioning: The process of testing and verifying that a new system or equipment operates as intended before full use.

System retrofits: Upgrades or modifications to existing equipment or systems to improve performance or extend useful life.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends Hexcel and Tennant. The Motley Fool has a disclosure policy.