Thursday, April 20, 2006

Investing in global water stocks: US listed companies and ADRs

The most popular article on this website is PHO -- Water ETF as a liquid asset. The Powers hares Water Resource Portfolio is hot. It has gotten alot of attention in the investment media and even Jim Cramer has talked about it.

At this point many investors want to look a bit further out into investing into international stocks in the water industry. To satisfy that interest Claymore has launched a UIT the Global Water Equities Portfolio, Series 3. When combined with the ADR's listed in PHO, its possible to make a list of non-US companies which are involved in the water industry. These companies are easy to invest in because their shares are traded on the major US stock exchanges. It would be very logical for an ETF sponsor to make an global clean energy and water ETF that would include more international companies than just those traded as ADRs. (FD: As usual you should do your own due diligence, and I indirectly own some of these stocks by virtue of owning shares of PHO.)

International Water Stocks

  • United Utilities PLC (UU), a major British utility company, that provides water and sewage services to much of northern England. The company also has global operations in the United States, Canada, Australia, the Philippines, and Continental Europe.

  • Veolia Environnement SA (VE), a major French water services and construction firm. Veolia is similar to Halliburton (HAL), except that Veolia does water, not oil. For example, Veolia recently won a contract to build a seawater desalination plant in Bahrain. This plant will make 273,000 cubic meters drinking water each day (72,118,966 gallons/day) and cost $336 million to build.

  • Suez (SZE), is the other major French water services and construction firm. Suez is similar to Veolia (VE) except that Suez also also owns and operates public water and electricity services which are its core business. Recently Suez has been involved in the takeover mania in Europe and has been gunning for italian electric company, Enel SpA (EN). This has made the stock very volatile over the past few months.

  • Companhia de Saneamento Basico do Estado de Sao Paulo (SBS), is water utility of the Brazillian state of Sao Paulo. SBS provides over 26.5 million people with water and sewage services. Companhia De Saneamento is in my opinion a very safe way to play on the strength of the Brazilian economy. According to SBS's own accounting, sales have grown by 12.7%, and EBIDTA by 18.6% in 2005.

  • Consolidated Water Company, Ltd (CWCO), is the water utility of the Cayman Islands, Belize, Barbados, British Virgin Islands, and the Commonwealth of the Bahamas. Increased carribean tourism has created demand for more fresh water to provide of things like golf courses and swimming pools. Shares of Consolidated Water Company has been trading at Google (GOOG) like valuations, which presents a certain level of risk untill new projects begin paying out earnings to justify the current share prices


At July 10, 2007 9:47 AM, Anonymous Anonymous said...

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