Portfolio #4 - Watergate

by Nojus - Date: 2010-09-15 - Word Count: 1255 Share This!

The problem is not that the world is running out of water. No, the problem is that drinkable surface water is increasingly polluted due to the urbanization of rural areas and industrial farming. And all the while, there are simply a lot more people who want a sip. When you look at the Earth from outer space, you see a lot of water. But less than half of 1% of it is fresh; The United Nations reports that the consumption of water worldwide is doubling every two decades. Already, 1 billion people do not have easy access to drinking water. By 2025, the U.N. figures that 2.7 billion people will suffer from severe water shortages. Because of waters critical role in our health, almost all U.S. and European water is held and managed by regulated utilities whose growth rates and expenses are capped by government fiat. The best way to play water is probably through the companies that supply pollution-control, purification, pipeline construction and irrigation-control products, though theres nothing wrong with owning a couple of successful water utilities as well.
A key example, China has 20% of the world's population but only 7% of the water. The water industry should be ripe with investment opportunities. Hydrologists expect the demand for water will continue to increase with the world's growing population. Some predict that by 2025, 3.5 billion people will be living in water-scarce countries, compared with 500 million in 2002.
Mayor exporters:
Turkey exports water to Israel and plans to ship more to Syria, Jordan and Greece
France sends tankers filled with millions of gallons of water to Algeria
Russia, New Zealand, Norway and Scotland have all considered exporting water
Malaysia provides most of Singapore's water
Islands in the Caribbean ship water by tanker to help with shortages
A plan by Canada to ship 1m gallons of water a day to the Middle East was dropped after protests by environmentalists.

It's a long-term, medium risk portfolio. Portfolio is for active investors, once per month to make a revision and maintains if it needs. So it's a friendly-use portfolio for beginners.
The portfolio is based on drinking water's market's companies' shares.
Portfolio's aim is to achieve higher than average markets' return. The benchmark is S&P 500 index.
But this is not an index fund approached portfolio. It's an active portfolio.

Stock selection

There are a lot of companies in the water market. It's not only drinking water suppling companies, there are companies that supply pollution-control, purification, pipeline construction and irrigation-control products etc. You can see that in the structure of the Palisades Water Index:
1. 3M Co. (NYSE: MMM) - Safety, Security, and Protection segment offers personal protection products, safety and security products, energy control products, cleaning and protection products, and roofing granules for asphalt shingles.
2. American States Water Company (NYSE: AWR) - engages in the purchase, production, and distribution of water.
3. Aqua America (NYSE: WTR) - operates as the holding company for regulated utilities providing water or wastewater services primarily in the United States.
4. Artesian Resources (NASDAQ: ARTNA) - engages in the distribution and sale of water to residential, commercial, industrial, governmental, municipal, and utility customers in the state of Delaware.
5. Ashland Inc. (NYSE: ASH) - The Ashland Distribution segment distributes chemicals, plastics, and provides environmental services.
6. Calgon Carbon Corp (NYSE: CCC) - offers products, services, and solutions for purification of water and air in the United States.
7. California Water Service (NYSE: CWT) - engages in the production, purchase, storage, treatment, testing, distribution, and sale of water for domestic, industrial, public, and irrigation uses, as well as for fire protection.
8. Connecticut Water Service, Inc. (NASDAQ: CTWS) - primarily supplies drinking water in Connecticut.
9. Consolidated Water Co. Ltd. (NASDAQ: CWCO) - Consolidated Water Co. Ltd. (NASDAQ: CWCO) Consolidated Water Co., Ltd. (CWC) engages in processing and distributing water in the Cayman Islands, Belize, Barbados, the British Virgin Islands, and the Commonwealth of the Bahamas.
10. Danaher Corp (NYSE: DHR) - The Professional Instrumentation segment produces and sells electronic test tools and calibration equipment; water quality instrumentation and consumables, and ultraviolet disinfection systems; retail/commercial petroleum products and services.
11. Emerson Electric Co. (NYSE: EMR) - The Climate Technologies segment provides products and services for the climate control industry, including residential, commercial, and industrial heating and air conditioning; and commercial refrigeration.
12. Flowserve Corporation (NYSE: FLS) - engages in the design, manufacture, distribution, and servicing of industrial flow management equipment worldwide.
13. General Electric Co. (NYSE: GE) - Its products include chemicals and equipment for treatment of water and process systems.
14. Gorman-Rupp (AMEX; GRC) - pumps and fluid control equipment.
15. IDEX Corp. (NYSE: IEX) - specializing in fluid and metering technologies, health and science technologies, dispensing equipment, and fire, safety and other diversified products built to its customers' exacting specifications.
16. IDEXX Laboratories Inc. (NASDAQ: IDXX) - The Water segment offers Colilert, Colilert-18, and Colisure tests to detect coli-forms and E. coli in water; Enterolert, which detects enterococci in drinking and recreational waters; and Quanti-Tray, which provides users measurements of microbial contamination.
17. Insituform Technology Inc. (NasdaqGS: INSU) - provides proprietary trenchless technologies to rehabilitate, replace, maintain, and install underground pipes worldwide.
18. Itron, Inc. (NASDAQ: ITRI) - The Software Solutions segment provides software applications for distribution system design and optimization, energy and water management, asset optimization, and commercial, industrial, and residential meter data collection and management.
19. York Water Co (NASDAQ: YORW) - impounds, purifies and distributes water.
20. Middlesex (MSEX)
21. Mueller Industries (NYSE; MLI) - tubes and fittings used in water distribution systems.
22. Nalco Holding Co. (NYSE: NLC) - provides integrated water treatment and process improvement services, chemicals and equipment programs for industrial and institutional applications globally.
23. Pall Corp (NYSE: PLL) - The General Industrial segment sells filters, coalescers, and separation systems for hydraulic, fuel, and lubrication systems on mechanical equipment, as well as to producers of oil, gas, electricity, chemicals, food and beverages, municipal, and industrial water and paper.
24. Pennichuck Corp. (NasdaqNM:PNNW) - involved principally in the supply and distribution of potable water in New Hampshire through its three regulated water utilities.
25. Pentair, Inc. (NYSE: PNR) - The Water segment manufactures and markets products and systems used in the movement, treatment, storage, and enjoyment of water.
26. Roper Industries Inc. (NYSE: ROP) - The Industrial Technology segment produces industrial pumps, flow measurement and metering equipment, industrial valves and controls, and water meter and automatic meter reading products and systems.
27. Companhia de Saneamento Basico do Estado de Sao Paulo (SABESP)(ADR) (NYSE:SBS) - provides water and sewage services to a range of residential, commercial, industrial and governmental customers in the City of Sao Paulo, Brazil.
28. SJW Corp (NYSE: SJW) - engages in the production, purchase, storage, purification, distribution, and retail sale of water in the United States.
29. Southwest Water Co. (NasdaqGS: SWWC) - provides water production, treatment, and distribution; wastewater collection and treatment; utility billing and collection; utility infrastructure construction management; and public works services.
30. Valmont Industries Inc (NYES: VMI) - The Irrigation segment manufactures and distributes mechanical irrigation equipment and related parts and services. Its equipment is used to apply water and chemicals to crops. The Tubing segment manufactures light-wall welded steel tubing, which are used in grain handling systems, pneumatic tube delivery systems, fire protection systems, automotive products, and exercise equipment.
31. Veolia Environnement SA (Vivendi Environ Depository Receipt) (NYSE: VE) - The Water segment integrates drinking water and wastewater activities, such as water distribution, water and wastewater treatment, and industrial process water, as well as manufacturing of water treatment equipment and systems.
32. Watts Water Technologies, Inc.,(NYSE:WTS) - through its subsidiaries, designs, manufactures, and sells water safety and flow control products primarily for the water quality, water safety, water flow control, and water conservation markets in North America, Europe, and China.

Portfolio was launched at January 4, 2010.

Performance since the beginning of the portfolio:
WaterGate - 5.40%;
S&P 500 - -0.75%.

Related Tags: watergate, palisades global water index

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