Mueller Water Products, Inc. (NYSE:MWA)

A lot of work aheas when outdated US waterinstallation needs to be replaced

mduk111 15.29

Everybody needs water, right? Not a sexy stock but will be there (with its dividend) for the long term

A foolish pick. :) I like its potential for strong gains in an area of biz that will only demand more from the likes of this one.

Mueller Water Products Inc is a leading manufacturer of a range of water infrastructure and flow control products for use in water distribution networks, water and wastewater treatment facilities, gas distribution systems and fire protection piping systems in North America. The company’s products are sold under three segments, Mueller, U.S. Pipe and Anvil, to municipalities, public and private water and wastewater utilities, gas utilities and construction contractors.

The flow products market in North America exhibits attractive growth rates not only through new residential and commercial expansion, but also repair and replacement. The water infrastructure within the U.S. is in dire need for repair. This overwhelming need for infrastructure repairs should allow Mueller to grow on a long-term basis.

The company recently announced its acquisition of Fast Fabricators Inc, fabricators of ductile iron pipe serving the water and wastewater treatment plant market in the United States. Fast Fabricator enjoys locational advantage in ten states as it strategically located close to number of growing water infrastructure markets.

A weaker housing market is definitely a significant headwind to overcome, but other factors are working to the company’s advantage to help it mitigate any potential negative effects to profitability. Mueller’s products are sold through extensive distribution network, with largest installed base of 3 million fire hydrants and 9 million irongate valves. Thus, the stock of this company offers good long-term opportunity to the investors.

NEC Supercompuer pick (collective2)

HG . . .

Great position to benefit from upgrade of water infrastructure.

Water issues in the South

infrastructure for water storage, distribution, and treatment is decrepit. at some point the rebuild will boost the core products

Like this stock and how it is currently undervalued.

Water is the ultimate liquid

ambitious competent profitable company
operating in buoyant

2/1/2007 Q1'07 earnings released after market close (Closing price $14.23)

* 1st quarter earnings of 17 million, or .15 per share, up from a loss of 48.8 million or .57
The loss was due mainly to acquisition and plant closure costs.
* Net sales decreased to 411.9 million from 480.4 million last year.
*Synergy run rate of 41 million for the quarter

Mueller Segment: Revenues of 167.1 million, OI of 35.7 million, volume decreased due to slow housing market
US Pipe Segment: Revenues of 117.4 million, OI of 7.2 million,Revenues dropped $60 million
Anvil Segment: Revenues of $133.6 million compared to $132.8 in the last comparable quarter. OI of $13 million vs. a $1.5 million loss

Debt is lower than last year, but unchanged from the end of the last quarter.
According to the conference call they have some prepayment penalties associated with their current debt.

I will be watching this company closer as they proceed into their first full year as a stand alone enterprise.

1/8/2007 Initial Writeup
I received my initial shares in the WLT spinnoff on 12/14, and purchased more on 1/8/06 for $14.40 at a P/E of 288

Nov 2: and Earnings were released after market close

* 4th quarter earnings of 16.9 million or .15 per share
* 4th quarter revenue of 518.1 million
* Debt reduced to 1.118 billion as compared to 1.132 billion at the end of Q3'06
* Run rate of 35 million in synergy savings
* Full year '06 earnings of 5.1 million or .05 eps based on 1.93 billion in sales
* Mueller was initially spun off of Walter Industries in 2006 at the end of May or beginning of June
The remaining ownership was spun off on 12/14/06 making Mueller a stand alone company.

This looks like a story of pure demand to me. I don't believe you can get a much more inelastic demand than that of human water supply. Here's a company well positioned to meet that need. According to the US Environmental Protection Agency, "much of the water infrastructure in the US was built over 30 years following World War II". They go on to state that there's going to be some serious rehabilitation and replacement in the near future. This found here: http://www.epa.gov/waterinfrastructure/. Our systems are old and decaying and absolutely must be replaced over the next several decades. The EPA states that pipe systems have life cycles that range from 15 to over 100 years, depending on the type of material used. The longer lasting pipes are steel which is rarely used anymore. The bulk of more recently installed pipes are made from different materials, which fail much sooner. There's no choice here. Without a proper water system, we cannot live. Mueller Water Products has only just begun their work. They currently operate mainly east of Illinois in the US and are expanding in a selective, managed manner.
This brings me to another point. They plan on expanding internationally. According to their website, they've broken the ice in both Canada and China. It's the China part of this which interests me. Not necessarily just China, but that entire region of the world. Many countries ranging from North China and Mongolia to Central and South/Southeast Asia don't have adequate water systems to support their growing populations. The United Nations General Assembly resolution 58/217 from 12/23/2003 declared 2005-2015 the International Decade for Action, "Water for Life". "Population growth between 1950 and 1995 caused the per capita availability of water to drop almost 70 per cent in South and Central Asia, 60 per cent in northern China and Mongolia, and about 50 per cent in South-East Asia." Something has to be done about this, and with the right strategy, Mueller Products stands to profit tremendously. The growth potential here is enormous. Mueller is making profits, is positioned to take advantage of superior long term trends, and operates in an industry which involves a demand that is absolutely essential to human survival. WOW! There's more but I don't want to slip into a 63 second pitch. Just providing a little brain chow for all you solidified bags of water reading this.

Water infrastructure. This will be important in globalization play.

Water, second only to oil, is going to become increasingly scarce.

Not so good news from footnoted.org-----

The demand for clean water.