Source: SMALLCAP NETWORK By Peter Graham
Water stocks Xylem (XYL), Calgon Carbon Corporation (CCC) and Lifetech Industries (LTCH) have what the products and expertise to address water issues in emerging markets.
Fresh clean drinking water is becoming increasingly scarce in many areas of the world where the population continues to grow, but Xylem (NYSE: XYL), Calgon Carbon Corporation (NYSE: CCC) and Lifetech Industries (OTC: LTCH) are three water stocks that are addressing water problems in emerging markets in different ways. That’s because these three water stocks develop filters, sanitation systems or other forms of water infrastructure that should mean no shortage of customers now or in the future.
A mid to large cap stock with two operating segments (Water Infrastructure and Applied Water) that was spun off from ITT Corp (NYSE: ITT), Xylem is a provider of equipment and service for water and wastewater applications with a portfolio of products and services that address the full cycle of water. Xylem has been slowly shifting its market mix away from developed and sowing economies like those of Europe to emerging economies where growth is faster and margins are higher. In addition, Xylem is planning “bolt-on” acquisitions that will complement its core business with $300 million targeted for deals next year. Its also worth noting that Xylem was the maker of many of the pumps that drained flooded parts of New York City after Hurricane Sandy blew through.
Small cap Calgon Carbon Corporation is a global manufacturer and supplier of activated carbon and innovative treatment systems, provides value-added technologies and services for optimizing production processes and safely purifying water and air. Calgon Carbon Corporation is one of the largest manufacturers of activated carbon and filtration type systems in the world and it has recently announced that it had received a $12.4 million contract for ultraviolet disinfection systems from the Los Angeles Department of Water and Sewer - second-biggest water provider in the US. In the middle of November, Calgon Carbon Corporation approved a share repurchase program for up to $100 million of the company's outstanding stock – a fairly sizable percentage given the company’s $800 million market cap. However, Calgon Carbon Corporation did report a loss last quarter due to what one analysts described as "a litany of one-time issues" that included delayed deliveries, lower production, Hurricane Isaac, the closure of a factory in China and severance payments from an ongoing cost reduction plan.
Small cap Lifetech Industries is an interesting water play because it has created an advanced air to water generator that produces clean water through filtering the condensation of moisture from air. The Lifetech AirWell System currently comes in the form of a home/office unit that will generate approximately 15 to 30 liters of water per day. However, Lifetech Industries’ technology is scalable and the company is currently in the process of developing customizable units that can provide water for any industry. In addition, Lifetech Industries has just signed an exclusive ten-country distribution agreement with a distributor in Africa that will target medical facilities, government agencies, schools and establishing water depots for the Lifetech AirWell System. Under the terms of the agreement, Lifetech Industries has the potential to bring sales of up to $75 million or more from Africa alone over a 5 year period, but the real potential is significantly more if other developing countries or emerging markets take notice of the Lifetech AirWell System for their water needs.
A mid to large cap stock with two operating segments (Water Infrastructure and Applied Water) that was spun off from ITT Corp (NYSE: ITT), Xylem is a provider of equipment and service for water and wastewater applications with a portfolio of products and services that address the full cycle of water. Xylem has been slowly shifting its market mix away from developed and sowing economies like those of Europe to emerging economies where growth is faster and margins are higher. In addition, Xylem is planning “bolt-on” acquisitions that will complement its core business with $300 million targeted for deals next year. Its also worth noting that Xylem was the maker of many of the pumps that drained flooded parts of New York City after Hurricane Sandy blew through.
Small cap Calgon Carbon Corporation is a global manufacturer and supplier of activated carbon and innovative treatment systems, provides value-added technologies and services for optimizing production processes and safely purifying water and air. Calgon Carbon Corporation is one of the largest manufacturers of activated carbon and filtration type systems in the world and it has recently announced that it had received a $12.4 million contract for ultraviolet disinfection systems from the Los Angeles Department of Water and Sewer - second-biggest water provider in the US. In the middle of November, Calgon Carbon Corporation approved a share repurchase program for up to $100 million of the company's outstanding stock – a fairly sizable percentage given the company’s $800 million market cap. However, Calgon Carbon Corporation did report a loss last quarter due to what one analysts described as "a litany of one-time issues" that included delayed deliveries, lower production, Hurricane Isaac, the closure of a factory in China and severance payments from an ongoing cost reduction plan.
Small cap Lifetech Industries is an interesting water play because it has created an advanced air to water generator that produces clean water through filtering the condensation of moisture from air. The Lifetech AirWell System currently comes in the form of a home/office unit that will generate approximately 15 to 30 liters of water per day. However, Lifetech Industries’ technology is scalable and the company is currently in the process of developing customizable units that can provide water for any industry. In addition, Lifetech Industries has just signed an exclusive ten-country distribution agreement with a distributor in Africa that will target medical facilities, government agencies, schools and establishing water depots for the Lifetech AirWell System. Under the terms of the agreement, Lifetech Industries has the potential to bring sales of up to $75 million or more from Africa alone over a 5 year period, but the real potential is significantly more if other developing countries or emerging markets take notice of the Lifetech AirWell System for their water needs.
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