AEGION CORPORATION (NASDAQ:AEGN)

CAPS Rating: 4 out of 5

The Company is a worldwide provider of proprietary trenchless technologies for the rehabilitation and improvement of sewer, water, gas and industrial pipes.

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Member Avatar SnowBawl (< 20) Submitted: 11/15/2013 9:19:58 AM : Outperform Start Price: $21.61 AEGN Score: 0

4 high upside small caps (Sterman).

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Member Avatar shaileshnita (71.43) Submitted: 10/28/2013 11:46:47 AM : Outperform Start Price: $23.56 AEGN Score: -11.53

It has good valuation.

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Member Avatar bigangrydino (67.99) Submitted: 4/16/2012 3:16:26 PM : Outperform Start Price: $17.56 AEGN Score: -8.62

This company is not glamorous but the work it does is incredibly important- Pipe repairs and strengthening through retrofit applications is going to be huge in the upcoming decades. Additionally, look at their recent acquisition of Fyfe- This should open up a big world of commercial structural strengthening opportunity, and this acquisition will pay off BIG TIME... but IN time... I am long pretty much EVERYTHING infrastructure related.

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Member Avatar Lawrence56 (< 20) Submitted: 4/13/2012 8:42:40 PM : Outperform Start Price: $17.40 AEGN Score: -8.88

Fix your leaky pipes please

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Member Avatar latinoeconomist (24.96) Submitted: 7/6/2011 1:54:46 AM : Outperform Start Price: $21.14 AEGN Score: -36.10

Strong growth, focus on profitability, currently undervalued.

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Member Avatar bobrobnc (66.60) Submitted: 6/28/2011 5:42:47 PM : Outperform Start Price: $20.26 AEGN Score: -34.94

screen: small cap, price-to-book

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Member Avatar EnigmaDude (91.04) Submitted: 6/6/2011 10:58:09 AM : Outperform Start Price: $23.79 AEGN Score: -53.09

See blog post by Wax...

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Member Avatar TMFRisingStars (< 20) Submitted: 5/18/2011 2:31:59 PM : Outperform Start Price: $25.32 AEGN Score: -54.37

Here's the buy rec:

http://www.fool.com/investing/general/2011/05/17/rising-star-buy-insituform-technologies.aspx

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Member Avatar TMF42 (95.87) Submitted: 5/18/2011 8:54:41 AM : Outperform Start Price: $24.91 AEGN Score: -53.68

http://goo.gl/rUGdF

The Teenage Mutant Ninja Turtles glorified sewer life. But the fact of the matter is that a significant water line bursts every two minutes in the United States, so before you pack up and move underground just realize that the pipes carrying our water and wastewater could've been built during the Civil War. The company best positioned to benefit from this crumbling infrastructure is still unknown, and thanks to its apparent link to cash-strapped municipalities, is unloved. Insituform Technologies (Nasdaq: INSU), the largest wastewater pipeline repair outfit around, is a classic unvestment. I'm establishing a 5% position for the Un Portfolio and look forward to gushing returns.

Tops in Trenchless Technology

Back in 1971, Insituform invented a trenchless technology for rehabilitating sewer pipelines that allowed cracked, leaky, or decimated pipes to be repaired in a quicker, cheaper, safer, and less obtrusive way. Previously, municipalities had to stop traffic, dig a trench, and replace the section of damaged pipe—it was a big to-do and was costly. But Insituform's cured-in-place pipe (CIPP) technology solved all of that. Typically, CIPP rehabilitations can be done from existing manholes by inserting a patented felt tube, curing it with resins and steam (which hardens the structure), and creating a new healthy pipe within the busted host pipe.

Demand today and demand tomorrow

The Office of Water Management, a division of the Environmental Protection Agency, reports that funding needed to bring water and wastewater pipelines up to snuff tops $33 billion. This means big backlog and future demand for pipeline repair businesses like Insituform. And since there isn't much debate that worldwide water infrastructure has been equally as neglected—and it only gets worse with time—global prospects should flow heavy for Insituform.

But Insituform's business is more than just water pipeline rehabilitation. It has a strong presence in the energy and mining industry, focusing on corrosion protection coating services for industrial, mineral, oil and gas piping systems. That segment accounted for 47% of 2010 earnings, and with oil and gas pricing still high and capital spending trends looking solid, the business should grow 10% to 15% this year. The pipeline of long-term growth (sorry, couldn't resist) looks robust, as new oil and gas finds are increasingly remote and require new pipeline infrastructure for transport to refineries.

The BIG THREE reasons I’m buying

1. Reputation and scale. Insituform has rehabilitated more pipe than any other firm. The fact that it invented CIPP technology, has a large workforce that it can mobilize quickly, and has a 40 year track record give it a competitive advantage when bidding on rehab projects. Insituform wins nearly 50% of the contracts it bids on because of its cost advantages and reputation.

2. Focus on operations to complement growth. Insituform's current management team came aboard in 2008 and has instilled a culture focused on operational improvement. Since 2008, operating margins have improved to 9.5%, up from only 2.7%. Improving operations coupled with growing business should bode well for Insituform's shares.

3. Great stewardship. New management is focused on profitable growth. In fact, they recently shuttered some European operations that didn't meet profitability hurdles and set a goal to achieve a 15% return on invested capital. (This ain't a hurdle the company can simply step over—just a few years ago, the company's return on capital was barely 2%.) And the board of directors recently instituted share ownership guidelines for all directors and senior management, so their interests are properly aligned.

What’s so “Un” about Insituform?

As always, there is some dirt floating in the water, but with a shares trading at 12 times expected earnings, patient investors should be rewarded.

• Insituform operates primarily in a dirty, boring business (the nice way to say it is "wastewater") and Wall Street doesn't care that much—only eight analysts (none of the big brokers) follow the company.

• The company bids for projects and is responsible for cost overruns. This leads to lumpy revenue and unexpected profit revisions (types of uncertainty) that make the stock unattractive to some investors.

• Insituform's sewer rehab business comes mainly from municipalities, who are largely broke. But many fail to understand that the bulk of pipeline repairs come out of water system user fees, not a budget line item. So the company's revenue stream tends to be much more stable than budget or capital spending focused companies like Mueller Water Products (NYSE: MWA) and Primoris Services (Nasdaq: PRIM).

That’s a buy

Insituform is the first industrial firm for the Un Portfolio, so it helps diversify our holdings. With a solid balance sheet and reasonable valuation to go along with its growth prospects, Insituform 's dirty business is a welcomed addition to the other dirty companies in the Un Portfolio.

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Member Avatar mkbb1155 (< 20) Submitted: 4/5/2011 3:56:04 PM : Outperform Start Price: $26.52 AEGN Score: -59.57

cost effective infrastructure repair for cash strapped municipalities.

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Member Avatar foolshand (73.83) Submitted: 4/4/2011 1:07:21 PM : Outperform Start Price: $17.32 AEGN Score: -66.59

b

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Member Avatar ju006he (< 20) Submitted: 2/22/2011 7:30:20 AM : Outperform Start Price: $26.57 AEGN Score: -59.87

Improving infrastructure will help this play in the long haul.

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Member Avatar saurabhprasad (97.36) Submitted: 2/2/2011 9:26:52 PM : Outperform Start Price: $28.45 AEGN Score: -69.19

See the PDF available at http://prasadcapital.com/2011/01/06/a-buy-pitch-for-insu/

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Member Avatar GunnarVagotis (96.77) Submitted: 11/19/2010 3:40:51 PM : Outperform Start Price: $22.91 AEGN Score: -61.49

Pushing hard on growth in an important sector.

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Member Avatar SIO394 (< 20) Submitted: 11/2/2010 2:48:24 PM : Outperform Start Price: $21.74 AEGN Score: -56.85

This stock is involved in a vital part of a recovering economy.

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Member Avatar tenmiles (99.64) Submitted: 10/26/2010 10:38:15 AM : Outperform Start Price: $21.55 AEGN Score: -57.48

Infrastructure play trading in the sewer today - one half billion in backlog; reasonable current valuation -using weakness to start initial long position around $22 - likely market beater looking out a few years

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Member Avatar archiemccabe (< 20) Submitted: 8/5/2010 2:50:03 PM : Outperform Start Price: $22.62 AEGN Score: -71.48

good stock hold

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Member Avatar dbb032 (40.80) Submitted: 7/9/2010 2:38:07 PM : Outperform Start Price: $21.30 AEGN Score: -73.33

They have a brilliant system for salvaging deteriorated underground utilities. Apparently management and marketing are weak, since they have failed to perform well, for a long time. I keeep hoping for a housecleaning.

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Member Avatar danovtroy (< 20) Submitted: 5/27/2010 2:13:08 AM : Outperform Start Price: $20.95 AEGN Score: -68.53

Our infrastructure is aging and &quot;no dig&quot; pipe repair has clear advantages.

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