Stock Market and Water Shares – Should we be buying or selling
The current market volatility means we need to review our assessment for the prospects for the water industry and share prices.
The strong conditions that the industry has enjoyed in the past couple of years remain the same. Economic issues and the stock market may and have however effected water company shares in the past week.
Valuations of water companies are at all time lows despite the industry having strong prospects for growth. We need water to produce virtually all products whether they are grown or manufactured and some industries require purer water than others (for example electronics). The manufacturers of water purification systems remain attractive and will continue to grow in our opinion.
There will also be a knock on effect to growth in the water industry. For example when making desalinated water there will be an explosion in energy recovery as the process remains so energy intense.
Companies like Watts Industries in the US making purification equipment will continue to be in demand. So in our view, water companies having been effected by the downturn look like being really good long term bets. Unfortunately for all you investors, Living-Water remains a private Ltd company.
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