Buy Itron Inc. (NASDAQ: ITRI).

Today we add a second holding from Marcato Capital: Itron (NASDAQ: ITRI), with a market cap of just $2.6 billion. Marcato has just reported that it more than doubled its position in ITRI in the fourth quarter, making the stock vault all the way up the rankings to become Marcato’s fifth-largest holding.

The increase of exposure to ITRI is especially remarkable considering Marcato reduced its position in most of its top stocks during the period. 

Itron makes hardware, software, and integrated systems for handheld electronic meter reading and automatic meter reading systems. Its customers are primarily utilities and its systems are installed in roughly 8,000 utilities worldwide. Its products allow utilities to take readings remotely, without needing to enter customers’ premises. If you have heard of the term “smart meter,” Itron has its hands in that.

While this may not sound all that exciting, working with utilities generates recurring revenue, and the smart-metering business is undergoing global implementation and it is growing.

We will have more details in an upcoming update.

Our initial suggested buy up to price is $72.