By Brendan Coffey, Cabot Global Energy Investor

Ansys (ANSS) is a company right in the middle of figuring out where power comes from, where it goes and how best to use it.

The company designs and runs complex and critical simulations for manufacturers of every stripe. Its customer base exceeds 40,000 and includes 96 of the top 100 industrial companies in the U.S.

Much of Ansys' expertise is around energy and energy efficiency. Its automobile customers use its software to design electric engines for cars and find ways for traditional cars to meet new mileage standards.

Oilfield services companies use it to simulate subterranean conditions on a drilling site to avoid downtime on rigs; and alternative energy companies use Ansys for designing solar cells, fuel
cells and pollution control systems.

More generally, tech companies are becoming significant energy hogs. Every Google search you perform is the energy equivalent of driving an automobile three inches.

More and more, applications used by the average person demand far more energy than a search engine query. Interactive maps, video streaming and cloud computing all demand more power -- and more efficient devices.

This summer, Ansys acquired a similar company, Apache Systems, which competed in
a complementary area. The combined entity has become a darling of the market.

Apache runs power usage analysis and optimization software for the electronics industry, including the world’s top 20 semiconductor companies (by sales).

Apache focuses on four areas: energy efficiency for consumer electronics like digital cameras and televisions, battery life for mobile phones and similar devices, energy cost for data centers, and tackling electromagnetic interference among systems in automobiles.

Apache’s sales growth has been strong, rising between 27% and 37% annually since 2006 to $46 million last year.

Ansys itself was a fairly impressive company before the Apache acquisition. The company posted annual revenue of $580 million in 2010 and $1.65 in diluted per-share earnings, both up firmly from the year before and continuing the trend of steadily increasing results.

For its latest quarter, sales were up 27%, (20% of which was organic growth), and double-digit growth was achieved in all of its geographical regions and most of its business lines. Per-share income was 48 cents in the quarter, up from 40 cents the prior-year’s period.

Ansys sales are built on a simulation product called Workbench, which it sells through a network of distributors.

One of the product’s appeals is that it is powerful enough to allow a full product -- such as an oil rig or a wind turbine -- to be modeled, viewed and tweaked.

Driving growth for Ansys is the increasing complexity of products as well as recognition that
performing simulations and engaging them earlier in the manufacturing and design process helps ensure higher-quality products and get them to market faster.

ANSS spent most of 2010 building a base between 40 and 45. It started a bull move 13 months ago that took shares to a high of 58 before the summer market troubles sent shares retracing to 45.

In late October, ANSS popped higher on news of the company’s excellent third quarter, putting shares into bullish territory on huge volume.

The recent new all-time high of 60 marks near-term resistance due to a slightly overbought condition. Use any dip to buy, since shares looked primed to continue to rally.

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