The Rude Awakening
Wall Street, New York
Wednesday, July 5, 2006 ------------------------- - Your water plays from Singapore to Germany and back
home again,
- Fireworks on the roof for all of Manhattan to enjoy,
- The Agora Financial reserve is open again, but for a
limited time only...
------------------------- Eric Fry, reporting from a rooftop deck overlooking the
East River... Yesterday evening, just after the twilight's last gleaming,
a magnificent fireworks display began bursting in air over
New York City's East River. Your Rude Awakening editors –
both senior and junior – along with a small collection of
friends and family, observed the display from a rooftop
deck very close to the South Street Seaport. Unfortunately,
we shared our prized vantage point with a large collection
of strangers. We would have preferred a slightly smaller crush of
humanity. On the plus side, however, the large chorus of
"oohs" and "ahhs" issuing from the strangers surrounding us
seemed to enhance the pyrotechnic display. And after it was
all over, we rode the elevator down to a friend's
apartment, re-filled our margarita glasses and chit-chatted
for a couple more hours. Our conversation never veered toward the historical events
underlying the evening's celebration, nor toward the war in
Iraq, nor toward the likely direction of interest rates.
Instead, we laughed about the theatrical Italian soccer
team and handicapped today's World Cup match between France
and Portugal. Only once did your editor's "talk
shop"...Actually, we "talked water." We exchanged a few
thoughts about some of the water-sector stocks our Rude
readers have been submitting over the last few days. In
short, we were very impressed. A few days back, we asked you, the Rude Awakening faithful,
to identify your favorite water stocks. As usual, you
responded with some terrific ideas. You identified a water
treatment company in Singapore, an industrial giant in
Germany and an up-and-coming renewable energy company in
Southern California. Most of the stocks you recommended trade on foreign stock
exchanges. But they also trade on the over-the-counter
market here in the U.S. In other words, most of these
stocks will be unknown to most American investors...but
that's probably a good thing. Read on... --- Invest in Water --- BLUE GOLD: The $661 Billion Market Your Broker Didn't See It's not oil...it's not gas... Even in the face of skyrocketing energy prices, its
outperformed them both -
Raking in 49 times better gains than the S&P 500. This global industry is set to grow 500% over the next
decade. And it's just one brand-new "Special Situation" that can
net you 300% gains this year - guaranteed! http://www.isecureonline.com/Reports/MSS/EMSSG731
-------------------------
Water Stocks, Part I
Edited by Eric J. Fry "Hi Joel," writes a faithful Rude Awakening reader named
Jim. "I am pretty sure you have already come across this
choice, but just in case you have not, take a look at
Hyflux Ltd. (#600 on the Singapore stock exchange. Also an
over-the-counter ADR here in the States under the symbol:
HYFXF).
"The Group's principal activity is selling water treatment
systems for both municipal and industrial applications to
water generating machines from ambient air and faucet
filters using advanced membrane filtration technology for
the consumer market. Its product offerings range from water
purification, separation and concentration for
manufacturing process streams, fluid treatment and
development of cutting edge technology in material sciences
to open its areas for membrane applications either through
in-house research or in collaboration with reputable
institutions worldwide. The Group is also an integrated
solutions provider, offering a suite of turnkey services
including process design and optimisation, engineering
procurement and construction management, pilot testing,
fabrication, installation, commissioning, operation and
maintenance as well as Design-Build-Own-Operate (DBOO)
solutions.
"Hyflux's top line sales revenue growth has been in the 50-
60% per annum except for a blip in 2004, likewise looking
under the hood the ROE has averaged around mid-thirties the
past few years and earnings continue to tick upwards,
mostly driven by China and Singapore. The company has a lot
of business moving forward. Their main objective is to do a
great job with projects in hand as they seem not to bite
off more than they can chew. Corporate governance &
transparency is very good as the company was given honors
for such. A nice added benefit is the Sing Dollar will
remain strong against the USD as we move forward.
"I am a value investor; so I prefer more of a bargain. I
would like to see the PE of Hyflux drop another 20-30%
before I would buy. Based on the company's trailing 12-
month earnings, the stock's PE is about 25." Next up, reader Ed Nevin writes, "An interesting water
stock is Consolidated Water Company, Ltd. The symbol is
CWCO. The company is involved in the building and operation
of desalinization plants. It is active in the Caribbean Sea
area, but was recently in the lead to build a plant in
Huntington Beach, CA. [Consolidated Water Co. has a market capitalization of $300
million and sells for about 27 times estimated earnings.] "I am in complete agreement with your evaluation of the
importance of potable water globally," reader Irene Morris
remarks. "It's a totally overlooked sector. Opportunities
in stocks dealing with this situation are few and far
between and I'm looking forward to your recommendations.
Apart from the usual subjects like WTR, SWW and CWT, one
that I found that had been good to me is RWE AG. Looking
forward to your compilation." RWE is a very substantial 100-year old German company that
operates in the fields of electricity, gas, water &
wastewater, waste disposal & recycling. "In the US, the UK,
Germany and in many parts of Continental Europe," RWE's Web
site explains, "[we] offer...water and waste water services
for each customer group – from private households to
commercial operations, industrial companies, municipal
utilities or regional energy suppliers. RWE is committed to
combining efficient water management with the highest
health and ecological standards." The company's stock market capitalization is $46.8 billion.
The stock sells for 13.5 times estimated earnings and
yields about 2.5%. It trades on the Frankfurt stock
exchange under the symbol RWE, and also as an over-the-
counter ADR here in the U.S. under the symbol: RWEOY.
In tomorrow's column, we'll share a couple more ideas from
the world of water stocks. [Joel's Note: Cheers for all of the suggestions and
insights. Please send any more on to us here at
aussiejoel@the-rude-awakening. In the meantime, we have a
few ideas of our own. Over the past few months, Chris Mayer
of capital & Crisis and your Rude editors have scoured the
world to identify the best ways you can get in on the
global water phenomenon. Check out what we came up with in
the Water Report right here: Blue Gold – Investing in Water
http://www.isecureonline.com/Reports/MSS/EMSSG712 --- The Ultimate Investment --- The Agora Financial Reserve Is Open... The Agora Financial Reserve is open...join now and get all
of our top research - for life. Make sure you secure your
membership soon...this offer is only good until midnight on
July 30, 2006. Click on the link below for a letter from
the Reserve Founder: Agora Financial Reserve - Open Until July 30 http://www.isecureonline.com/Reports/AFR/EAFRG716 | 
