Waterlogged. (Wall Street West).On Wall Street these days, one hears a lot about biotech and oil. What investors are over-looking is ordinary water. "The water industry is about 40 percent as large as the oil industry, and much larger than the global pharmaceutical industry," said Neil Berlant, senior vice president in the West Los Angeles
In much of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , old pipes, dams and treatment plants are in need of repair - a $1 trillion fix-up job, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. industry estimates. "We will actually spend more than that, the deteriorating infrastructure is in such pitiful condition," Berlant said. "But the question is how can investors profit?" He thinks he has the answer: Companies that make water cleaner, for reasonable prices. Berlant believes Santa Monica-based Cadiz Inc., which plans to bring in water from an aquifer underneath the Mojave to Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. residents, is worth investigating. Berlant also likes Vista-based Glacier Water Inc., which operates clean-water vending machines. He's especially intrigued by Glacier Water's preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. . "Trading now at $19.10 a share, Glacier Water preferred offers an 11.8 percent annual yield, which is paid every month," Berlant said. "They are buying back preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. when they can. Also, Berlant said, West Los Angeles-based Kayne Anderson & Rudnick has bought 50 percent of the company for its clients. Berlant acknowledges that Glacier Water is a small capitalization company, and the preferred stock (treated as bonds) would not be considered investment grade. Will water stocks ever rise to a boil on Wall Street? "It's coming," predicted Berlant. "There will come a day when water prices start rising. When that happens, then Wall Street will take the plunge." Contributing columnist Benjamin Mark Cole Mark Cole is a multi-instrumentalist blues and roots musician based in Gloucester, UK Music Mark primarily writes and performs blues music but also writes and performs music influenced by other American roots music genres such as americana, cajun, zydeco, bluegrass and writes about the local investment community for the Los Angeles Business Journal. His new book is "The Pied Pipers of Wall Street: How Analysts Sell You Down the River." published by Bloomberg Press. |
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