Barron's: " Gushing over water stocks " ? hehe
(The new high flying infra-structure stocks !!)
cbs.marketwatch.com
By Nicole Maestri, CBS.MarketWatch.com
Last Update: 1:54 PM ET Mar 3, 2001
SAN FRANCISCO (CBS.MW) -- Water stocks could spurt in trading Monday based on a Barron's article that looked favorably upon the sector.
With demand for water worldwide relentlessly rising and as much as $1 trillion in upgrades needed for the water infrastructure in the United States over the next 20 years, the article said the outlook is good for companies that provide clean water.
And as the overall market tumbles, water stocks are looking more attractive, the article says.
American Water Works (AWK: news, msgs, alerts) and Philadelphia Suburban (PSC: news, msgs, alerts) , which have grown markedly through acquisitions, have become favorites of analysts and money managers as they post steady earnings and sometimes substantial dividends, Barron's says.
Shares of American Water closed up 99 cents, or 3.7 percent, to $27.49 Friday, while Philadelphia Suburban ended the day up 7 cents to $23.37.
The sector is also attractive because the potential for further consolidation is strong, the article said. Cities, faced with aging distribution lines and creaky treatment plants, are thinking about linking with private partners or selling their systems to private operators outright, Barron's said.
Water companies likely to go on the block are those owned by electric or gas utilities, which have decided they could use the extra cash, the article explains. Among those listed as potential acquisition targets by Barron's are Sierra Pacific Resources (SRP: news, msgs, alerts) , NiSource (NI: news, msgs, alerts) , which wants to divest its Indianapolis Water unit, and DQE (DQE: news, msgs, alerts) , which has had difficulty with the small water utilities it purchased over the past few years.
Also performing well are shares U.S. companies focused on water and wastewater treatment, such as Cuno (CUNO: news, msgs, alerts) , Ionics (ION: news, msgs, alerts) , Insituform (INSUA: news, msgs, alerts) and Tetra Tech (TTEK: news, msgs, alerts) , Barron's said.
Barron's added that the global industry's two largest companies, Vivendi Environment and Suez Lyonnaise des Eaux, both Paris-based, are expected to list their stocks in the States, possibly this year.
Nicole Maestri is a reporter for CBS.MarketWatch.com |
