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Advanced Water Technologies

Written By Nick Hodge

Posted June 30, 2009

**Editor’s Note: Be sure to read Energy and Capital’s up-to-date resource page on water investments.


Water is everywhere. At least when it comes to headlines and human interest stories.

When it comes to the actual resource, water is getting harder and harder to come by.

It’s a profitable trend that I’ve been following for quite some time.

The premise is elementary: There is a limited amount of freshwater on earth.

Increased withdrawals to support booming populations and agricultural needs coupled with lax conservation practices and industrial pollution have led to a serious problem.

Add to that years-long droughts in the American Southwest and Southeast, and water is the new hot topic.

I’ve been saying this would happen.

Water Problem & Profitable Solutions

Truth be told, the water industry isn’t very exciting.

For years the industry has lumbered around, offering decent dividends but not much else. But falling supply, incessantly rising demand, and a failing infrastructure are changing all that.

Now that the stimulus has allocated $20 billion to improving and updating our water infrastructure the industry and investors are buzzing with excitement.

All the standards still apply. Engineering and planning firms like Veolia (NYSE: VE) and Tetra Tech (NASDAQ: TTEK) will do well by designing new water treatment facilities. Companies like Jacobs Engineering (NYSE: JEC) and Layne Christensen (NASDAQ: LAYN) will do well building the new facilities. And companies like Northwest Pipe (NASDAQ: NWPX) and Badger Meter (NSYE: BMI) will do well supplying pumps, pipes, and parts.

You can do well by investing in them.

But even more exciting than the brick and mortar business of water management is the next wave of water opportunities.

Water 2.0

Technology has advanced so far that computers can now be used to conserve water.

This opens up a whole new world of water investing.

Lindsay Corp. (NYSE: LNN), for example, makes a crop irrigation system that farmers can monitor and move remotely from their homes via embedded GPS technology, ensuring each acre gets no more water than it needs.

Other advancements are making farm equipment incredibly savvy. New John Deere (NYSE: DE) tractors are equiped with sensors that tell farmers exactly how much water and nutrients a crop should receive based on data accumulated and analyzed in real time.

And NPR just ran a story on a company called PureSense, which makes underground sensors to monitor soil moisture and other factors. Farmers can check the status of their crops with an iPhone application.

Indeed, desperate water times call for desperate water measures. And more than a handful of them will prove profitable for informed investors.

I’ll continue to cover this trend, as I have been for years, here at Energy & Capital and at our sister site, Green Chip Stocks.

Call it like you see it,

Nick Hodge


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