Like Cisco, Itron was the 800 lb gorilla that fell asleep on confidence and awoke to find that the market was changing and competitors were getting stronger. The positive news is that they are now awake and recognize their situation. More positives: single-digit PE, strong market position, positive cash flow, and return of the CEO who took them to the top.
Negatives: the daily volume is relatively low (~400k shares) and there is a relatively high short position (>5%) so shorts can put pressure on the stock by trading large blocks with market orders. However, the number of shares short decreased by about 10% in August. Check the short position early in October to see if it continues to decrease. If so, this relieves some of the short pressure and suggests that sentiments are shifting to long positions.
I believe that ITRI deserves a PE in the range of 15x to 20x if they are able to regain momentum. The worldwide opportunities for water, gas, and electricity metering systems are huge. Earnings for next year are estimated at ~$4/share. A 15x PE puts the stock at ~$60/share; a 20x PE puts the stock at ~$80/share. At ~$35/share today, the downside is very limited (already single digit PE); however the upside is 15 to 20% by the end of the year and much higher in 2012...but this is just my opinion. I bought more today at just under $35....only time will tell if this was a good move.