HWCC (Houston Wire & Cable Co.)

What could be more boring than a company that makes wires and cables? And yet this appears to be a strong growth story with a good fundamental business and steady growth and profitability measures.

HWCC concentrates on specialty wires that provide safer environments and offer better quality. The composites that make up the insulation around the wires do not give off halogen gas when they burn which is especially important when being installed in factories. There have been several cases where expensive equipment was destroyed not by a fire in the building but by the gasses given off from the wires burning.

The company is finding plenty of customers as building continues both domestically and abroad. Earnings continue to ramp up as sales increase quarter after quarter. The stock is trading at a 19 times 2006 expected earnings, and if the 2007 estimates are correct, the stock is only 17 times those earnings.

Technically the chart pattern is healthy with the company only being public since June of 2006. It has traded up quickly from the IPO at $13 but then has consolidated for some time. Its most recent break to a new high came on strong volume which shows institutional demand for the shares. I expect a continued run as long as the overall market holds up.

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