ABB (ABB): Decades of growth

By Keith Fitz-Gerald, editor The Money Map Report

It is estimated that countries around the world are set to spend between $25 and $30 trillion of fresh infrastructure investment over the next two decades.

As the de facto global leader providing all things related to power and automation technology, ABB Ltd. (NYSE: ABB) is poised to potentially ride a 20-year wave of extraordinary profits.

Creating, managing, and delivering electricity really amounts to the critical lifeblood of a city, a region, or a specific site project.

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And because of that, governments and industries alike aren't very likely to stray away companies with bulletproof track records.

The stakes are just too high to take a chance on anyone other than the very best - and ABB definitely qualifies as one of the very best in the world at what it does.

For example, Zurich-based ABB recently won an order worth $48 million from the SEPCO III Electric Power Construction Corporation - a leading Chinese EPC (Engineering, Procurement, Construction) company.

The deal will entail ABB to deliver a substation for a new power plant in Saudi Arabia that will deliver electricity from the 1,200 megawatt Rabigh power plant located 150 kilometers north of Jeddah to industrial and residential customers in the region.

For the project, ABB will design, supply, install and commission the 380 kilovolt (kV) substation, which will include gas-insulated switchgear, a range of circuit breakers including the generator circuit breaker as well as the control, protection and telecommunication equipment necessary to keep the stuff humming - pun absolutely intended.

Substations like the one ABB will build in Saudi Arabia are key installations in the power grid. When complete, the substations transform voltage levels and facilitate efficient transmission and distribution of electricity.

And as everyone knows, having reliable electricity is at the key of any properly functioning city - or countryside, or desert for that matter.

Currently ABB is the world's leading supplier of air- and gas-insulated substations, with more than 10,000 installed worldwide. It is the company's worldwide reach that puts them at the forefront of the "global" infrastructure build-out forecasted for the next 20 years - and in our portfolio.

Further, in December, ABB announced that the company had won a $70 million order from Transport for London, to build a new bulk supply point substation to power the London underground rail system.

The project is part of London's plan to upgrade power supply to the underground railway lines and support the introduction of new rolling stock.

As part of the project, ABB will design, supply, install and commission the substation along with supplying products that include 22 kilovolt (kV) and 11kV switchboards as well as coupling transformers.

In addition, ABB will install about 20 kilometers of 22kV and 11kV power cable in the tunnels and ducts.

Both of these projects underscore a couple of ABB's fundamental strengths: extensive experience in the specific project types and a familiarity with the local project by virtue of already having worked in the region.

Both of those are huge benefits for ABB because of the high dollar amounts of the projects and the high importance of the projects to the surrounding communities.

If you are new to the Money Map Report, or if you haven't already done so, take this opportunity to begin assembling a position in ABB, and plan on holding on to the position for at least 12 months, maybe even as long as 20 years. We think you'll be as happy with the results.

Learn more about this financial newsletter at The Money Map Report.