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Wedbush's water industry picks

  • It's not surprising Q3  guidance in the water and renewable-energy sector was relatively subdued given mixed economic data and continuation of delayed orders for big projects, says Wedbush, however ...
  • Only Tetra Tach ((TTEK) showed ill-effect from the sequestration and instead there are encouraging signs out of municipalities.
  • Xylem (XYL) and Watts Water (WTS) said Europe had been worse than expected, but saw recent stabilization. While several noted weakness in China, A.O. Smith (AOS) bucked the trend with a 30% increase in sales there.
  • Wedbush's favorites  are low-risk, high performers like Pentair (PTR), Franklin Electric (FELE), and Valmont Industries (VMI). Valmont is a controversial name, but the team fells concerns over slowing irrigation business are baked into the stock and the valuation - particularly given the balance sheet and ROIC - is compelling.
  • Names to avoid are Nuverra Environmental (NES), Aegion (AEGN), and Energy Recovery (ERII) given disappointing quarters for the first two and an extremely overvalued ERII.
  • ETFs of note: FIW, CGW, PHO, PIO.
Comments (1)
  • airlarr
    , contributor
    Comments (231) | Send Message
     
    Pentair is PNR
    20 Aug 2013, 07:18 PM Reply Like
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