1. I viewed the company as an inexpensive de-leveraging play.
2. The company is poised to benefit from America's aging water infrastructure.
Those remain true. And, as Matthew Vincent writes in the current issue of Britain's Spectator, water is a growing concern globally:
It’s in ever greater demand and increasingly short supply. It’s becoming more and more costly to extract, process and transport. But it’s not oil — in fact, one City fund manager claims, what we’re talking about here ‘is far more important over the longer term than that’. Purely and simply, it’s water — or more to the point these days, impurely and problematically. So there’s no surprise that, according to the Financial Times, ‘investors are seeking to exploit a shortage of that most basic of commodities’.
This is particularly interesting:
A lack of clean water and basic sanitation is now a problem for up to 40 per cent of the world’s population and knocks at least $556 billion a year off the world’s economic growth, according to the World Health Organisation — equivalent to about 1 per cent of global gross domestic product. Even the US’s annual economic losses from drought are estimated at up to $8 billion, based on figures from the National Oceanic and Atmospheric Administration. For this reason, Unep says, ‘During the 21st century, water is destined to become as precious as oil.’
This is not because water is running out: there is exactly the same amount of water on the planet as there was a million years ago. The problems are those of distribution, contamination and consumption. An awful lot of water is not where people need it, a situation exacerbated by climate change — Canada, for example, has as much water as China, but just 2.3 per cent of its population. So some people sip bottled water by swimming pools while others go thirsty — what economists call ‘the Evian effect’.
Remember, this article is penned by a man in the UK for a UK publication. Mueller Water Products isn't mentioned. But the article provides us with another perspective on the importance of water -- and the equal importance of getting it to people needing it.
MWA 1-yr chart: