Water

[FarmerGeorge]

Along with the Energy theme, Food, Infrastructure and perhaps hard Commodities I think a good sector for the next few years will be Water. I'm currently researching what's available in the US market and don't hold anything but thought a thread for discussion on this strategy might be appropriate.

My initial impression is that those companies which are capable in de-salinization and waste water transfer, and are operating in high growth markets (think BRIC) with relatively few political restraints will do well.

Any thoughts?

[Arbitrage]

You are not alone. This article about investing in water appeared in the NZ Herald last month.
http://www.nzherald.co.nz/section/3/...ectid=10470751

[miner]

Mentioned water years ago on this site and also the finding of water leaks in city's mains systems as there is big money in this for the company's that do it.
To give you an idea we found a leak in a 750mm mains in Sydney years ago that they said would have been pumping out about a million dollars worth of water a year,so gives you an idea what the contracts to find the leaks are worth,other city's around the world will be the same.

Water is the next oil.

Cheers
Miner

[shasta]

Along with the Energy theme, Food, Infrastructure and perhaps hard Commodities I think a good sector for the next few years will be Water. I'm currently researching what's available in the US market and don't hold anything but thought a thread for discussion on this strategy might be appropriate.

My initial impression is that those companies which are capable in de-salinization and waste water transfer, and are operating in high growth markets (think BRIC) with relatively few political restraints will do well.

Any thoughts?

Have been looking into Water "companies" of late myself, or those with a substantial interest in it.

I like TSE:ASX & in particular there recent acquistions in the US...

Have a look at them, not sure if listed elsewhere?

[axion]

I remember reading something a year or so ago about a former oil tycoon (or something of that nature) buying up water as he thought that was the future.

[FarmerGeorge]

Thanks for the suggestions, it's been a bit of a hot topic and I recently attended a talk by someone from Veolia discussing how great he thought things were going be for for water companies into the future. It's not as simple as it looks though as I'm sure there are plenty of political issues to sort through when it comes to supplying drinking water to citizens.

I looked at TSE and also at TSI which they recently spun off. Also been looking at the US listed water funds, many trading at growth company type P/E's.

I'm convinced it will be a good sector but the trick will be to find decent companies within it which aren't already selling for huge multiples.

[tobo]

I agree the sector has real possibilities.
Limited commodity and becoming more critical into the future. Impact of global warming on global food (shifting climates mucking up the balance of farms, wrong-footing farming businesses).
eg Australia, the lucky country with all it's minerals -
Struggling drought-ridden farms would be transformed with the addition of water...imagine farms spreading into that wasteland of desert further and further. All it needs is lots of energy to make lots of water.

I need to research more to see at what point this would become economic, and if there's any Ausi businesses working on this.
Irrigation water is seen to be cheap per litre now, but I think the balance may shift.

[FarmerGeorge]

The two big players seem to be Veolia and SUEZ, both originally French but also listed in the US. Both have excellent prospects in China also where it is relatively easy to get economies of scale providing water services, i.e. large and growing urban populations. Veolia even have some large projects in NZ, perhaps Aust as well. Also working on growth is GE with a number of water related acquisitions under their belt over the past decade or so.
Acquisition targets in the sector might be a good bet, also anyone who can produce/install/operate/maintain efficient desalination plants. Consensus seems to be if there was enough energy, water wouldn't be a problem as we could just start using the oceans. "Solve the energy problem = solve the water problem". Considering another two mid-size US companies: Pentair and Watts Water. There is also a large south american firm Rio somthing but I've just had a mind blank trying to remember it.
Of the five I'm inclined towards Watts but as yet haven't bought anything. Seems to be an industry where size really matters!

[Financially dependant]

I remember reading something a year or so ago about a former oil tycoon (or something of that nature) buying up water as he thought that was the future.

Boone Pickens, CEO of BP Capital, oil tycoon and owner of some US water rights. He has been ahead of the curve for 50 years!

http://www.theoildrum.com/tag/t._boone_pickens

[Winston001]

Good call FG, we discussed this theme last year. http://www.sharetrader.co.nz/showthr...ighlight=Water

I haven't invested yet, been watching PHO on AMEX which rose $4 since I started - but the $NZ also rose a similar amount. I'd prefer Australian stocks as they are easier to keep an eye on but PHO is an easy index-type investment. There is also the international version PIO which appeals to me.