Mueller Water Products, Inc. (MWA)

brightsideLP (39.89) Submitted: 8/28/08 8:53 PM : Start Price: $11.05 MWA Score: -19.20

Mueller Water is a company that you can buy at these valuations and know that you will eventually be rewarded.
When it traded down to $7....I was simply amazed at the value proposition being offered.

This is an excellent play on infrastructure. Our water pipes here in the US are in dire need of a very costly fix and MWA is a direct beneficiary of this. Timeframe is 3-5 years - however I feel the stock will reward shareholders who purchase here and average down on any volatility or potential retest of the lows.

MWA-b is the vehicle from the WLT spinoff and hold the majority of voting rights. MWA-a has more volume and less outstanding shares - so it moves faster and gets ahead of the B shares. They should trade together so any variance can be used to your advantage.
If anything the B shares should be more attractive to large fund managers due to the voting rights.

$1.2 Billion Market Cap.

tte pe = 32
est pe = 19

Trading just over half Enterprise Value of $2.2 billion.
(not an overly vital statistic but worth mentioning)

Price/Sales (ttm):   0.66
Price/Book (mrq):   0.90

cash / debt - cashflows adequate to support my assessment
(roughly 5 x operating cash flow)

Management has made steps to make MWA a better company over the long haul as opposed to worrying about short term goals set by wall street. I love this in a company - and I love that wall street punishes this action and gives us valuation discounts.

Very attractive company at these valuations. $7 to $11 should be accumulated.

Report this Post Replies: 1 | Reply | Permalink