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Consolidated Water (CWCO) Rides on Acquisitions & Expansion
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Consolidated Water Co. (CWCO - Free Report) is benefiting from acquisitions and expansion of operations in regions having significant demand for potable water. However, like other water utilities, its performance could be adversely impacted by weather variations and risk of contamination of water sources.
The company is gaining from its acquisition-driven growth strategy. Consistent with this, last year, it acquired 51% interest in Aerex Industries, Inc., a U.S. original equipment manufacturer and service provider of a wide range of products and services applicable to municipal water and industrial water treatment. The full-quarter contribution from the acquired Aerex assets boosted revenues from its Manufacturing segment in the first quarter of 2017 compared with the year-ago quarter.
Other water utilities like American Water Works Company, Inc. (AWK - Free Report) and Aqua America Inc. are also making strategic acquisitions to expand their operation.
In addition to finding new markets to further expand its drinking water and wastewater services, the company is also working relentlessly to expand its existing operations in the Cayman Islands, The Bahamas and Belize. The new project, which is coming up in Mexico, will also help to boost its performance.
The demand for water services fluctuates with weather conditions and level of tourism. Traditionally, the company sells more water during the first and second quarters of the year – when the number of tourists is greater and local rainfall is less in its service territories – compared with the third and fourth quarters. However, a reduction in tourist count or greater-than-expected rainfall in the locations in the first and second quarter could critically affect its revenues, cash flows and results of operations.
Like other water utilities, despite taking safety measures, there is always a risk of contamination of its processed water that may result in disruption of its services and adversely affect its revenues.
Price Movement
Shares of Consolidated Water Co. returned higher than the Zacks categorized broader industry in the last six months. The company’s shares gained 18.3% while the Zacks categorized Utility – Water Supply industry’s gain was 10.3%.
We expect that usage of advanced technology, strategic acquisitions and expansion of operation in areas that have significant requirements for potable water is going to boost the performance of the company.
Zacks Rank & Another Stock to Consider
Consolidated Water Co. currently carries a Zacks Rank #2 (Buy). Another stock in this space worth considering is Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp (SBS - Free Report) , sharing the same rank as Consolidated Water Co. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company’s 2017 and 2018 earnings estimates moved up 10.8% and 11.6% to $1.13 and $1.25, respectively in the last 60 days.
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Consolidated Water (CWCO) Rides on Acquisitions & Expansion
Consolidated Water Co. (CWCO - Free Report) is benefiting from acquisitions and expansion of operations in regions having significant demand for potable water. However, like other water utilities, its performance could be adversely impacted by weather variations and risk of contamination of water sources.
The company is gaining from its acquisition-driven growth strategy. Consistent with this, last year, it acquired 51% interest in Aerex Industries, Inc., a U.S. original equipment manufacturer and service provider of a wide range of products and services applicable to municipal water and industrial water treatment. The full-quarter contribution from the acquired Aerex assets boosted revenues from its Manufacturing segment in the first quarter of 2017 compared with the year-ago quarter.
Other water utilities like American Water Works Company, Inc. (AWK - Free Report) and Aqua America Inc. are also making strategic acquisitions to expand their operation.
In addition to finding new markets to further expand its drinking water and wastewater services, the company is also working relentlessly to expand its existing operations in the Cayman Islands, The Bahamas and Belize. The new project, which is coming up in Mexico, will also help to boost its performance.
The demand for water services fluctuates with weather conditions and level of tourism. Traditionally, the company sells more water during the first and second quarters of the year – when the number of tourists is greater and local rainfall is less in its service territories – compared with the third and fourth quarters. However, a reduction in tourist count or greater-than-expected rainfall in the locations in the first and second quarter could critically affect its revenues, cash flows and results of operations.
Like other water utilities, despite taking safety measures, there is always a risk of contamination of its processed water that may result in disruption of its services and adversely affect its revenues.
Price Movement
Shares of Consolidated Water Co. returned higher than the Zacks categorized broader industry in the last six months. The company’s shares gained 18.3% while the Zacks categorized Utility – Water Supply industry’s gain was 10.3%.
We expect that usage of advanced technology, strategic acquisitions and expansion of operation in areas that have significant requirements for potable water is going to boost the performance of the company.
Zacks Rank & Another Stock to Consider
Consolidated Water Co. currently carries a Zacks Rank #2 (Buy). Another stock in this space worth considering is Companhia de saneamento Basico Do Estado De Sao Paulo – Sabesp (SBS - Free Report) , sharing the same rank as Consolidated Water Co. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company’s 2017 and 2018 earnings estimates moved up 10.8% and 11.6% to $1.13 and $1.25, respectively in the last 60 days.
3 Stocks to Ride a 588% Revenue Explosion
At Zacks, we're mostly focused on short-term profit cycles, but the hottest of all technology mega-trends is starting to take hold...
By last year, it was already generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for those who make the right trades early. See Zacks' Top 3 Stocks to Ride This Space >>