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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Snowshoe who wrote (23017)	7/6/2006 4:27:31 AM
From: Snowshoe	Respond to of 541375

World Economy Grows, Water Stocks Boil Over news.yahoo.com Murray Coleman Wed Jul 5, 7:00 PM ET Commodity prices have had an impressive run. But it hasn't been just oil and metals that have soared in price. Companies that supply another commodity, water, are also enjoying good times, thanks to growing world demand. Also, U.S. cities have aging water infrastructure that needs to be replaced. Such fundamentals have boosted prospects for PowerShares Water Resources (AMEX:PHO - News). Since launching late last year, its price soared 25% through May 10. Then, it tumbled 17.8% as commodities corrected. Still, after bottoming June 14, the ETF has trended up. Heading into Wednesday, the fund had returned 10.12% in 2006. "So it's still up for the year and ahead of where it started in December," said Steve Hoffmann, president at Water Tech Capital, a Dallas-based industry consultant. "And the fundamentals remain firmly in place." Palisades Water Index He also designed the Palisades Water Index, the fund's benchmark. "Water has become a $260-plus billion industry," said Hoffmann. "Many of the names in the index are large industrials. So when the downturn started in mid-May in the general market, these companies weren't spared in the short-term." But some sectors have actually fared well. Resource managers held up relatively well from mid-May to mid-June, says Hoffmann. "These are largely big, international consulting and engineering firms that focus on integrated studies and major projects related to delivering water resources," he said. Six Groups That includes research and working with everything from watershed management to cost-effective water treatment systems. "So instead of just designing and building plants, they're looking at the total integration of water resource management," said Hoffmann. Resource management is one of six groups in the index. The fund has 38 names. Resource firms comprise seven of those stocks. Leaders this year include Veolia Environment (NYSE:VE - News), a French public service company. "When you look at the management of resources going forward, we can't just damn up rivers and plants," said Hoffmann. "We have to look at ways to improve watersheds. And these are one of the top players in that field." Others in the fund are Badger Meter (AMEX:BMI - News), Valmont Industries (NYSE:VMI - News) and Tetra Tech (NasdaqNM:TTEK - News). Another leading group this year is infrastructure. "This is the sector that deals with the distribution of water," said Hoffmann. Some of those are Franklin Electric (NasdaqNM:FELE - News), Layne Christensen (NasdaqNM:LAYN - News), Mueller Water (NYSE:MWA - News) and Watts Water Technologies (NYSE:WTS - News). "They've been very steady and didn't get hit as badly as other areas in the last month," said Hoffmann. "In fact, infrastructure as a group was up nearly 20% in the second quarter."