Water Works Co., Inc (AWK)
Back on January 17th, I highlighted
AWK as a
momentum stock due for its global fundamental growth story, earnings
defensive stock properties. The water
company also throws off a 2.75% dividend yield as well, but that’s just
on the cake
Since that time the stock has risen
over 6.5%, which is substantial
considering that this stock have an average monthly
trading range (ATR) of just $2.00. There have been quite a few
over the past month that have not only helped propel this slow moving
the short term, but also may have positive effects on the stock over
Report and Recent
American Water Works is the largest publicly traded U.S.
water and wastewater utility company. Founded in
1886 with headquarters in
Voorhees, N.J., the company employs approximately 7,000 people who
drinking water, wastewater and other related services to an estimated
million people in more than 30 states and parts of Canada.
On February 29th, AWK was awarded a
CBC Latrobe, LLC (City Brewery). Their Contract
Services Group will manage
start-up and operations for the wastewater pre-treatment plant at City
in Latrobe, Pennsylvania. The plant will pre-treat up to 590,000
gallons a day
of wastewater from the brewery operations before being discharged to
municipal wastewater plant. That plant
in Latrobe produces 20 million cases annually of beer, teas, and energy
A day prior they completed 13,300
feet of water main
upgrades in California. AWK (and this
pipeline) provides reliable water and/or wastewater services to
On that same day, they released
Q42011 earnings, missing on
revenues but beat expectations on earnings per share and guiding higher
2012. They saw a significant increase in
GAAP earnings per share and margins grew across the board.
The big water company reported revenue of $639.8 million
versus expectations of about $720 million on the same basis. GAAP
sales were 3.7% lower than the prior-year quarter's $664.5 million.
EPS came in at $0.36; the Zacks
Consensus Estimate was for $0.32
per share. GAAP EPS of $0.36 for Q4 were 57% higher than the prior-year
quarter's $0.23 per share. All in all it
was a strong report and sent shares marching higher.
American Water Works remains a key element in the growth of
this country. The fundamentals remain intact and the stock remains a #2 Zacks Rank Buy.
A recent study showed that our water infrastructure is in
dire need of repair. Just plugging the
leaks in water pipes and building new ones to keep up with a growing population
could cost the United States $1 trillion over the next 25 years and AWK will
play a large role in those repairs and upgrades.
Water infrastructure repair and replacement will most likely
fall on the shoulders of local municipalities, which are strained at the moment. But with improvement in tax revenues, better
budgeting and maybe a little bit of federal aid (for green technologies) AWK
should see continued success over the years.
Zacks recommendation is for AWK to outperform relative to
the market with a current price target of $37.80.
THE ORIGINAL ARTICLE
Momentum Zacks Rank Buy Stocks:
Alliance Data Systems (ADS)
Consumers have been saving
more of their money as of late, but at the same time consumer credit is
increasing. Revolving credit lines are on the rise and based
data, the US consumer is getting just a little bit stronger.
Due to the
consumer, the average corporation is seeing a small boost in revenues
companies are likely to spend a bit to increase their sales and
customers. In turn, consumers may be a little more
willing to spend
some of that “just in case” money on goods and services.
After the financial
of 2008-09, credit all but dried up and corporate profits
the world continues along its slow recovery, companies like Alliance
providing credit, marketing and retention solutions that keep the
engaged and spending.
With the increase we are
seeing in consumer credit and confidence, it could be a sign that
set to improve at ADS as well. READ FULL
Parametric Technology Corporation
Corporation or “PTC” for short is in the business of helping discrete
manufacturers succeed by meeting their globalization, time-to-market,
operational efficiency objectives.
They are a technology
solution that provides an engine, roadmap and more for companies in
industries looking to bring new products to market cheaply and
improve profitability and design.
As populations grow,
economies improve and we evolve as a culture it becomes more important
and existing products that improve and economize our lives to make it
multiple markets quickly and easily. PMTC provides solutions
technologies to help make that happen. READ
PerkinElmer, Inc. (PKI)
PerkinElmer Inc. isn’t a
company name that rolls off the tongue of the average
American. But their
products, services and technologies have been well known in the
community for 70 years and most likely have crossed your path at some
you may have just not known it…
Perhaps their diverse
business, which is focused on the periphery of health and human
sciences or the
lack of just one strong public brand, keeps them hidden from the
This quiet but strong stock might be worth a look as preventive care,
environmental health consciousness and overall safety awareness
A Levy is the
Momentum Stock Strategist for Zacks.com. He is also the Editor in
charge of the
Whisper Trader Service.