This Fund Just Dumped Itron Stock, but Should Long-Term Investors Follow Suit?

Aristotle Capital Boston cut its stake in Itron (NASDAQ:ITRI) by 123,119 shares in the third quarter, contributing to a reduction in the overall position value of about $18.35 million, according to a November 14 SEC filing.

What Happened

According to a U.S. Securities and Exchange Commission (SEC) filing dated November 14, Aristotle Capital Boston sold 123,119 shares of Itron during the third quarter. The estimated value of this transaction, based on quarterly average pricing, is approximately $15.7 million. Following the trade, the fund reported holding 303,560 ITRI shares worth $37.8 million as of September 30.

What Else to Know

Itron accounts for about 1.95% of the fund’s reportable U.S. equity AUM after the sale.

Top holdings after the period:

• NASDAQ:HURN: $54 million (2.8% of AUM)
• NASDAQ:ACIW: $44.6 million (2.3% of AUM)
• NYSE:DY: $44 million (2.3% of AUM)
• NASDAQ:HQY: $41.3 million (2.1% of AUM)
• NASDAQ:MTSI: $40.6 million (2.1% of AUM)

As of Monday, Itron shares were priced at $95.22, down 15% over the past year and well underperforming the S&P 500, which is instead up about 13% in the same period.

Company Overview

Company Snapshot

• Itron provides hardware, networked solutions, and software services for energy, water, and smart city management, including smart meters, sensors, and data analytics platforms.
• The company generates revenue through a mix of product sales, software licensing, and recurring services, including cloud-based solutions and consulting.
• It serves utilities, municipalities, and smart city operators worldwide as primary customers.

Itron, Inc. is a leading provider of integrated technology solutions that enable utilities and municipalities to manage energy and water resources efficiently. The company leverages its hardware, software, and data analytics capabilities to deliver end-to-end solutions across the utility and smart city sectors. With a global footprint and a diversified product portfolio, Itron maintains a competitive edge through innovation and a strong focus on operational efficiency for its clients.

Foolish Take

Itron’s shares surged last quarter before pulling back roughly 20%, and the reduction likely reflects a decision to lock in gains rather than a loss of confidence in the business. That context matters given how concentrated the fund’s top holdings remain in names like Dycom, ACI Worldwide, and Huron Consulting, where recent performance has also been strong.

Operationally, Itron’s latest quarter showed improving quality beneath softer headline growth. Revenue declined 5% year over year to $582 million, largely due to project timing and portfolio optimization, the company said, but margins moved sharply higher. Gross margin expanded 360 basis points to 37.7%, while adjusted EBITDA rose 10% to $97 million. Even more notable, free cash flow nearly doubled to $113 million, underscoring the company’s ability to convert earnings into liquidity despite near-term revenue pressure.

With a $4.3 billion backlog and growing recurring revenue in its Outcomes segment, Itron remains positioned for long-duration utility spending tied to grid modernization and smart infrastructure. For patient investors, the recent pullback looks more like consolidation after a strong run than a fundamental breakdown.

Glossary

Stake: The ownership interest or investment a fund or individual holds in a company.
Assets Under Management (AUM): The total market value of investments managed by a fund or investment firm.
Exposure: The degree to which a portfolio or fund is invested in a particular asset, sector, or market.
Reportable U.S. Equity: U.S. stocks that a fund must disclose in regulatory filings due to size or regulatory requirements.
Position: The amount of a particular security or asset held by an investor or fund.
Quarterly Average Pricing: The average price of a security over a specific quarter, used for estimating transaction values.
Smart Meters: Electronic devices that record and communicate energy or water usage data to utilities for monitoring and billing.
Cloud-based Solutions: Services or software accessed via the internet, hosted on remote servers rather than local computers.
Consulting: Professional advisory services provided to organizations to solve business or technical challenges.
Smart City Management: The use of technology and data to improve urban infrastructure, services, and resource efficiency.
End-to-end Solutions: Integrated products and services covering all stages from initial setup to ongoing operation and support.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Huron Consulting Group. The Motley Fool has a disclosure policy.