Bel-Fuse, a competitor of Power-One (PWER), and a major shareholder, recently upped it’s stake in PWER at share prices of around $1.30 per share. Bel-Fuse first bought into PWER and attempted to acquire the company back in February 2008. The original shares were purchased at little over $2.

I consider Bel-Fuse’s purchases significant, since as an industry insider, Bel-Fuse has a deep understanding of PWER’s businesses and hence a better chance than most investors of determining a fair value for PWER.

The major risk with PWER, is as I’ve mentioned in the past, is the company’s high leverage, and inability, at least in the past to deliver consistent, if any, profits. The high debt level is especially risky in the current credit environment, and probably explains the nearly 40% drop from my original purchase price (though the 40% drop in the overall market is a contributing factor, as well).

However, my gamble on PWER is predicated on the company’s rapidly expanding alternative energy business. My feeling remains that PWER’s alternative energy business (inverters for solar and wind) will experience exponential growth in the coming years, and bring the company back to sustained profitability this quarter or next.

Basically, if the company can navigate thru this credit crisis, and survive, the equity will experience a tremendous rebound on the heels of a rapidly growing inverter business and vastly improved financial results.

But, will the company survive? That’s the question. We’ll find out more information at the company’s next quarterly conference call slated for next week.

Incidentally, since the company has not warned this quarter, I have a strong suspicion that they will meet or beat estimates, as they did last quarter. A report of even a tiny profit this coming quarter and/or some degree of positivity regarding future financial performance, could send the stock up 50%+ in a matter of days.