Hold - Price 4.68 on May 6
by Brean Murray Carret & Co.

Our Hold rating is based on both valuation and end-market outlook. The shares are trading at the higher end of our expected range (E2010, 28 times)...and we see few near-term catalysts. Yet MWA remains the largest U.S. supplier of infrastructure to water utilities, and we expect it to [substantially] benefit from increased spending in this area once conditions...improve. Market cap: $541 million.

Mueller seems to have weathered the worst of the storm. This is not a bad area to dip your toe into the water

Good Returns

steady growth

This is a play on infrastructure and protectionism play. If they ever start to sell of some subsidiaries it will go up. They could also get bought by a Canadian company in the Loonie trade.

Water infrastructure

ROUND OUT PORTFOLIO

the housing market is so horrible, they are not directly correlated

From Barron's 7-16-07:

"The company in question, Mueller Water Products (MWA), makes things like hydrants, valves and pipes used in water distribution and treatment. Because its two classes of common stock control similar economic interest, they have always traded in tight tandem -- until last month, when they curiously began to diverge.

By Thursday, Mueller's A shares were worth about 16.41. But the super-voting B shares -- each giving eight votes to just one for the A shares -- were at 14.53.

How are the two classes different? The company's own Website declares they "have identical rights in all material respects" except for the B shares' superior voting power. The A shares are slightly more liquid, but their marginally higher trading volume had existed long before the recent divergence.

"Apparently, indexing has created and sustained an inefficiency we'd think would be arbitraged away in today's ultra-competitive markets," says Michael Econn, a co-manager at Bondurant Management. Going against the flow, the New York hedge fund sold the A shares it held and bought the discounted B shares, essentially counting on the gap closing once the index-related gush subsides."

Management smiles when your toilet pipes collapse, when a drunk runs into a fire hydrant, when your City sewer main explodes. Ching, Ching, Ching, hear that money sing!

growth and products

spin off stock going nowhere