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How to invest in water stocks

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Often overlooked as a commodity, water supplies could become increasingly critical as emerging economies around the world improve their diets and demand more agricultural resources for the production of meat.

“For many years (water) has been treated as a free good and supplies have been taken for granted,” Hugo Rogers, manager of the Thames River Water & Agriculture fund in London, tells The Telegraph. “As a result, aquifers are falling and reservoirs are running dry.”

The implications could be felt around the world. Indeed, two of the largest aquifers in the U.S. are already at risk. The Ogallala, which runs from Wyoming to Texas and does not replenish, is expected to be depleted in the next 25 years, The Telegraph reports. Lake Mead – also among the largest aquifers in the country – has fallen more than 100 feet in the past seven years alone.

Even as water supplies dwindle, demand is gradually increasing around the world with some analysts calling for global water usage to be 40 percent greater in 2050 than it was in 2000. Depleted aquifers and an aging and inefficient water infrastructure present opportunities for water investors – particularly in the water conservation and purification sectors. Here’s a handful of water stocks to research further if you expect prices to climb in the coming years:

Water ETFs

Claymore S&P Global Water Index ETF (NYSE:CGW) An ETF that mirrors the S&P Global Water Index, CGW is fairly conservative with a primary focus on two business clusters in the water industry: water utilities and infrastructure companies and water equipment and materials companies. The fund is truly global in scope with holdings from Organo Corp. (TYO:6368) in Japan to Geberit AG (VTX:GEBN) in Switzerland. The fund’s weightings follow: Industrials (46.05%), Utilities (42.46%), Materials (8.56%) and Information Technology (2.93%). 12-month return: +15 percent

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PowerShares Global Water Portfolio ETF (NYSE:PIO) PIO mirrors the the Palisades Global Water Index and features a good mix of value and growth stocks. Weightings follow: Large-Cap Value (26.09%), Mid-Cap Growth (28.74%), Mid-Cap Value (11.31%), Small-Cap Growth (26.49%), and Small-Cap Value (7.38%). As of March 7, the fund’s largest holding was agricultural irrigation and fabricated metals manufacturer Valmont Industries, Inc. (NYSE:VMI). Think of PIO as PowerShares Water Resources ETF (PHO) with slightly more international exposure. 12-month return: +12.2 percent

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PowerShares Water Resources ETF (NYSE:PHO) Like PIO, PHO also mirrors the Palisades Water Index. PHO, which is older and more established, has significantly out-performed PIO since PIO’s inception in the summer of 2007. It also trades at roughly twice the volume of PIO. PHO seeks to identify a group of companies that focus on potable water, water treatment, and water consumption-related technology and services, and it’s slightly more focused on U.S.-based water companies than PIO. 12-month return: +14 percent

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First Trust ISE Water Index Fund ETF (NYSE:FIW) FIW mirrors the ISE Water Index, which is comprised of 36 stocks focused on potable and wastewater industries. FIW is the most thinly-traded of all the major water ETFs. Currently, it’s heavily weighted toward industrial water stocks (which comprise 59 percent of the fund’s holdings). 12-month return: +17 percent

Individual water stocks and tickers

AECOM Technology Corporation (NYSE:ACM) A commercial and government consultant for water-related projects including the planning and develpment of highways, airports, bridges, mass transit systems and more. 12-month return: -1.6 percent

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Aqua America, Inc. (NYSE:WTR) A holding company for water utilities that provide water or wastewater services for three million people in 14 Southern and East Coast states. 12-month return: +35 percent

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Ashland Inc. (NYSE:ASH) A global chemical company with more than 100 years in the industry, Ashland serves a number of chemical-related markets from oil to papermaking chemicals. 12-month return: +11.2 percent

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Companhia de Saneamento Basico ADR (NYSE:SBS) Majority-owned by the State of Sao Paulo in Brazil, SBS offers water and sewage services in 365 of the 645 municipalities in Sao Paulo. 12-month return: +46.7 percent

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Danaher Corporation (NYSE:DHR) A sprawling company with dozens of divisions, Danaher’s environmental segment provides water-related services including ultraviolet disinfection systems and industrial water treatment solutions. 12-month return: +34.4 percent

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Flow International Corporation (NASDAQ:FLOW) Harnessing ultrahigh-pressure (UHP) waterjet technology, Flow’s equipment can be used for manufacturing and industrial cleaning. 12-month return: +37.2 percent

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Flowserve Corporation (NYSE:FLS) As a provider of flow control systems, FLS manufacturers pumps, valves, seals, automation and aftermarket services to improve delivery and conservation of everything from water to oil and gas. 12-month return: +17 percent

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Itron, Inc. (NASDAQ:ITRI) Itron helps water utilities collect data and improve metering of water usage. The company also services the electric and gas utilities. 12-month return: -23 percent

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ITT Corporation (NYSE:ITT) ITT’s three core businesses will soon be spunoff into three independent publicly traded companies, one of which will serve as a water technology company focused on industrial water pumps, water analytical instruments, irrigation systems, wastewater treatment and more. 12-month return: +7.2 percent

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Lindsay Corporation (NYSE:LNN) By marrying advanced electronics with irrigation, Lindsay Corporation promises to conserve water, energy and labor for the agricultural industry. 12-month return: +78.1 percent

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Nalco Holding Company (NYSE:NLC) A holding company focused on industrial water, energy and air applications, Nalco’s water treatment services are used by a wide range of clients, from petrochemical companies to paper manufacturers. 12-month return: +9.7 percent

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Pentair, Inc. (NYSE:PNR) Pentair offers a wide range of water services from drinking water, fire protection and pool and spa solutions for the hospitality industry to manufacturing spray nozzles, tanks, crop and drip irrigation systems for the agricultural industry. 12-month return: +9 percent

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Roper Industries, Inc. (NYSE:ROP) Roper designs and manufacturers water meter and automatic meter reading (AMR) products and systems for water utilities as well as pumps for irrigation, agriculture and wastewater applications. 12-month return: +51.2 percent

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Tetra Tech, Inc. (NASDAQ:TTEK) Tetra Tech helps clients optimize businesses for energy performance and water usage. The company also designes and executes renewable energy plans for industrial and governmental organizations. 12-month return: +11.6 percent

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URS Corporation (NYSE:URS) URS works with governments and organizations to develop water, wastewater and hydropower projects. 12-month return: -6.7 percent

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Valmont Industries, Inc. (NYSE:VMI) Valley Irrigation, a division within Valmont, has been building precision irrigation equipment for more than 55 years. 12-month return: +22.3 percent

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Veolia Environnement (NYSE:VE) A French environmental services company, Veolia’s water services segment specializes in the outsourced management of water and wastewater services. 12-month return: -4.1 percent

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Watts Water Technologies, Inc. (NYSE:WTS) Watts’ water quality, water conservation, water safety and water flow control products serve residential and commercial markets from Europe to China. 12-month return: +28.6 percent

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3 Responses to How to invest in water stocks

  1. james moylan says:

    I have a web site where I research stocks under five dollars. I have many years of experience with these type of stocks. I would like to suggest a exchange traded fund for those investors that would prefer investing in water resource stocks though an exchange traded fund that invests in stocks related to water resources rather than own individual stocks. PowerShares Global Water symbol (PIO)

    • Vince says:

      Yes I would like to invest into water…I invest into other stock …but water came to me and it;s the first of it”s kind. Diffrent maybe a upcoming company in Africa would be profitable? Contact me so we can talk more about your website please. I would like to invest into a company starting out or low in the PPS but proving a good profit with in the 2 year time frame. OTCBB is one of my Fav. I do have some in NASDAQ as well but mostly Bioenergy, nothing like water…but I believe we use it wasteful and you got to have it..I figure at sometime with all the energy co. coming up there has to be a demand for recycled, renewable,portable something profitable with water. Plus I could add that a lot of 3rd world countries are already in demand for wells and water..Africa being the one counties recomended to invest into, not just for water either. Thanks! Lets talk. Vince

  2. […] for water investors. Here’s a handful of water stocks to research further if you …http://tradingstocks.me/how-to ..How to Invest in Shares & The Stock Market – Financial Expert™This is Financial […]

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