Sunday, April 21, 2013

"Sorry I missed you last week with the market at an all-time high. Taxes and Birthdays took away all of my time. But I'm back with Aqua America, (WTR), this week"

Dow Jones Industrial Average 14,865  (UP, All-Time High) Week Ending 04-12-2013
Dow Jones Industrial Average 14,547.51 (Down) Week Ending  04-19-2013


What a week! The Boston Marathon, the race that is the lifelong goal to which long distance runners aspire, Patriot's Day, and a treasonous, cowardly bombing attack on innocent children and bystanders. A week of hunting down and battling these terrorists on the very streets where our colonists fought the British to gain our independence as a country.  A town in Texas blown apart by a sudden explosion at a fertilizer plant with many people killed. Finally, last Friday, our cat Mia passed away and we buried her in our garden this morning. Life moves on. 

The forum of this blog is to bring you good investment ideas, no matter what is happening in the world, and I will do that today. Aqua America Inc. (Symbol WTR, $33.05) is the stock I would like to discuss. 


If you will recall, your monthly water bill that you receive today used to be the amount of the bill you received quarterly!! Water is a valuable commodity. Aqua America is a monopoly that keeps acquiring small water companies every year across the country and keeps adding to its coverage area footprint. Now to the numbers.

Return on Equity is 15.06% and the PEG ratio of 4.68. The PEG ratio is way above my norm, but the industry average PEG for water companies is 4.29, and WTR is growing faster than the others. The PE ratio of 23.39 also reflects that growth. 


The five year earnings growth for the company is 18.65% and 5 year sales growth has been 4.17%. Quarterly Profit Margins at the company are 38.09%. 2013 earnings are projected at $1.40 per share. 2014 earnings are  forecast at $1.49 per share. 


Revenue for 2012 was 758 Million dollars. The company pays a dividend that currently yields  2.12%. The real interesting numbers are these:  12 month Total Return 49.68% and 3 year total return of 87.28%.  

Aqua America Inc (WTR) can be a nice addition to your portfolio that should have some downside protection if the market starts going the wrong way. I say you can start taking positions in WTR right here this week.



It should be an interesting week coming up with Apple Computer reporting earnings this week. Let us hope there is a dividend raise and a buy back of shares. They have lost 250 Billion in market cap and can no longer remain mute to their stockholders.


Let's see if Gold keeps going down this week and if we are truly in a Deflationary Period in the economy. If we are, the plan will be to eliminate debt rather than invest in assets.  I will have to pick up a copy of A. Gary Schilling's, "The Age of Deleveraging, Updated Edition: Investment Strategies for a Decade of Slow Growth and Deflation" and study what we all should be doing with our money. 

Oh, and a last note; Memo to terrorists:  We are a people who were born out of a revolution for our freedom in this USA country. When you attack us, you just make us stronger and more united. One time a country surprise attacked us back in 1941. We ended up dropping two atomic bombs on them.  We have the medal to maintain our freedom in all circumstances. We welcome all liberty loving people and offer an opportunity to all nationalities and religions to join us here and around the world in peace and friendship.



Freewilly

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