Hammond Power Solutions

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Hammond Power Solutions (TSX: HPS.A) is the leading North American producer of dry-type transformers and related magnetic products. The company is 104 years old and credits its success to a relentless focus on product and service quality. To differentiate this report, we interviewed some of Hammond’s key distributor partners to better understand its competitive advantage. We found that HPS.A is seen as a service quality leader and that technology-driven changes in the market over the past decade are placing a growing premium on such companies. Our investment thesis for this stock is that Hammond’s market position allows for continued +2x industry growth via US distributors in the near term, with further upside as a preferred upstream supplier to clean-energy grid investment.