Freakonomics: Clean Water Stocks
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Created by Freakonomics
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Date updated:05-10-2007

In an insightful post on the freakonomics blog, economist Steven Levitt and co-author of Freakonomics, dissects a report that stated that pesticides in water in Indiana resulted in the poor performance of certain students in standardized tests if those students were conceived between June and August. Levitt argues that the authors of the research paper did not factor in the fact that children born during those months might be relatively young for their grades and that would effect test performance.

That said, in the stock market perception is often reality and if everyone starts getting worried about pesticides seeping into the water in the US then its time to start looking at the clean water stocks. At Stockpickr we set up the Freakonomics: Clean Water Stocks portfolio to start tracking what is in fact a global phenomenon. Worldwide demand for water is expected to double over the next 20 years while the actual supply of water available to people is potentially going to remain stagnant. Pollution and other environmental disorders set in and create potential pandemics as filth and disease spread. While Indiana might, in fact, be safe, the rest of the world might have cause to worry and will give ample reason for the revenues and earnings of the companies mentioned below and in the above portfolio to ramp up quickly.

symbol name last price % change open
  • +
  • CCC
    Calgon Carbon Cp
  • $15.61
  • -6.08%
  • $16.23

A pureplay in the purification-of-water sector is Calgon Carbon Corp (CCC). Their products are used to remove organic compounds from water, air , and other liquids. The company is ramping up their profitability with analysts expecting the company to go from losing money last year to 16 cents a share earnings this year and 30 cents a share in earnings the year after.

People owning CCC also tend to own: AMDBRLCAEISAIRATWEONCIDCC

TheStreet.com Rating: B What is this?

  • +
  • JEC
    Jacobs Engineerng
  • $40.90
  • -8.30%
  • $42.16

a company that normally provides its services to the oil and gas industry but has also developed an expertise in clean water treatment is engineering and construction company, Jacobs Engineering (JEC), which has a subsidiary devoted to providing the project management, engineering, and materials for providing potable water to areas. Because of their exposure to the oil and gas industry they count among their investors one of the greatest investors ever, T. Boone Pickens. The companies earnings are expected to go from $1.61 per share in 2006, to $2.22 per share in 2007 to $2.57 per share in 2008, giving them a forward P/E of slightly above 20 and solid double digit growth each year. They've beaten analyst estimates for the past four straight quarters. JEC is also in a recent Cramer portfolio from Mad Money, Cramer's Go-To Stocks where he states that earnings estimates for JEC, and others on his list including QCOM and FWLT, are way too low for the year.

People owning JEC also tend to own: AKAMCMGFCXGOOGRIGTJXCHL

TheStreet.com Rating: A- What is this?

  • +
  • GE
    Gen Electric Co
  • $21.38
  • -0.88%
  • $20.54

GE also has a subsidiary for manufacturing the chemicals and equipment for treatment of water and process systems. GE is owned by, amng others, value investors such as Warren Buffett amd David Dreman. Click on the above links to see their top holdings.

People owning GE also tend to own: AIGBACCCOPCVXFNMJNJ

TheStreet.com Rating: C+ What is this?

  • +
  • AMN
    Ameron Inc
  • $51.95
  • -10.92%
  • $56.82

Makes the pipes for water transmission.

People owning AMN also tend to own: AAPLMSFTBMSEDADCADPIAFAM

TheStreet.com Rating: A- What is this?

  • +
  • ASH
    Ashland Inc (new)
  • $27.01
  • -2.17%
  • $27.05

provides environmental services (i.e. they clean up the mess everyone else dumps)

People owning ASH also tend to own: ATGBACCBMNINFBNIPGR

TheStreet.com Rating: C What is this?

  • +
  • BWTR
    Basin Water Inc
  • $1.49
  • -14.37%
  • $1.65

Builds groundwater treatment systems.

People owning BWTR also tend to own: CNQGGPWEWTRCAVCNXTDIET

TheStreet.com Rating: D What is this?

  • +
  • FSI
    Flexible Sltns In
  • $1.49
  • 0.00%
  • $1.47

engages in the development, manufacture, and marketing of patented water technologies worldwide

People owning FSI also tend to own: CKYS.PKFRPTGRSR.PKGSPI.PKJSDANXGRAD

TheStreet.com Rating: D What is this?

  • +
  • SDIX
    Strategic Diagnos
  • $1.71
  • +2.40%
  • $1.62

engages in the development, manufacture, and marketing of antibody products and analytical test kits for a range of food, water, agricultural, industrial, environmental, and scientific applications in the United States and internationally. It primarily focuses on immunology, proteomics, bio-luminescence, and other bio-reactive technologies.

People owning SDIX also tend to own: ACLIAPOLAUYBABYBBBYBDAYBRKA

TheStreet.com Rating: D+ What is this?

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Portfolio not tracked!

05/30/2007 14:10 PM CDT Asked by Farleydog
Marc Cuban Q - If you could take any 1 public company private to run for yourself for the next 3 years...which one would ot be and why?

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