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High Voltage Stock Investments: The DC DC Converter Market

High Voltage Stock Investments - The DC DC Converter Market - Vintage Value InvestingFor some time now, the renewable energy sector and particularly the solar energy industry, have been offering up some interesting opportunities for investors. What the drive for renewables has also done is create opportunities in other related markets and the DC DC converter market is now high voltage.

What are DC DC Converters?

DC DC converters are used in millions of electrical items and devices worldwide. They perform an extremely important function by taking mains electricity and converting it to the precise voltage required by the item or device it is linked to.

There is nothing particularly new about this type of electronic circuitry. What is relevant here, however, is the technological developments that have been made in order to produce DC DC converters that are more efficient and therefore more valuable.

Naturally, where there is value, there is demand, and demand means profit.

Investment Opportunities   

Companies that develop and make high voltage power conversion products are seeing some excellent growth. XP Power are one such company and currently the price for shares in the company is at an all-time high – testament to the success that the industry is enjoying.

In October, XP Power announced plans to purchase US based power systems manufacturer Comdel for $23 million. They have also seen a 34% increase in revenue over the first nine months of the financial year, when compared to the same period for 2016.

This kind of success is being echoed around the industry. Power Integrations have also recently announced increased revenues of 9% year over year, but it isn’t just the markets where there is a profit to be made, adopting this technology can mean savings for the companies who opt to do so.

Integrating the Technology  

Installing or upgrading the power infrastructure of a business can lead to considerable savings in the long term. Not only that but the financial benefits will be compounded by the fact that the business will also have reduced its carbon footprint by doing so.

Because DC DC converters are more efficient, they use less energy and for businesses that use a lot of power the savings that can be made are huge. Industries such as healthcare, transport, defense, and aviation are of such a size that neglecting to integrate this type of technology isn’t really an option.

Investment Strategies

It is for these reasons that the power solutions industry has been flagged as one to consider carefully when looking to invest. When industries, like the ones mentioned above, go ahead and integrate the new technology the stock price of those supplying the technology is likely to rise even higher – spelling good news for those looking to go long on investments over time.

Conversely, when spikes occur due to acquisitions made by companies in the sector or when announcements are made regarding the winning of contracts, this may provide an opportunity to consider shorting and thus securing a quick win.

Industry Overview

Strategy aside, what one can be sure about is the fact that this sector and the technology that it develops, and manufactures is not going away any time soon. As further legislation is introduced to help steer both industry and society towards a much-needed path for greater sustainability, then technology will continue to lead the way and create avenues for investment.