Just as Wall Street is the guardian of America’s financial capital, some 52,000 water systems in the U.S. are a key guardian of America’s “natural capital.” Because most are owned by cash-desperate municipalities, many are in even worse shape than the Detroit automakers, unable to repair hundreds of thousands of miles of old leaky pipes and derelict wastewater treatment plants.
With Barack Obama having made infrastructure repair a national priority, and with the federal Environmental Protection Agency (EPA) on record that fixing the U.S.’s water infrastructure will cost $277 billion, this often-overlooked investment sector appears ready for rapid growth, as Neil Berlant, the granddaddy of water-oriented investment managers, has been shouting to an increasingly responsive audience.
Asked by EnergyTechStocks.com to name the companies most likely to benefit from increased spending on water infrastructure, Berlant, who runs the PFW Water Fund (Symbol PFWAX) highlighted eight firms, none of which you’re likely to hear mentioned by TV's talking heads.
Ameron International Corp. (AMN) is a broad-based infrastructure concern with significant water-related business. This Big Board-traded firm makes both concrete and steel piping, as well as protective liners. NASDAQ-traded Northwest Pipe Co. (NWPX) concentrates on high-pressure steel systems primarily for drinking water.
The Gorman-Rupp Co. (GRC), whose shares trade on AMEX, makes and sells pumps, motor controls and related equipment used for flow control, not just for water but also heating, ventilation and air conditioning (HVAC) equipment. Big Board-traded Mueller Industries Inc. (MLI) also deals in parts for the water and other industries, its products including tubes, fittings and valves.
Badger Meter Inc. (BMI)and Itron Inc. (ITRI) make advanced meters that should be in demand as the Obama administration embarks on what might be called the “smartening” of America’s natural resource infrastructure, with meters optimizing and minimizing water and power consumption, thereby saving money and increasingly scarce resources. Badger trades on the Big Board, Itron on NASDAQ.
Disclosure: no positions