Finding Value And Consistency In Consolidated Water Co.

Consolidated Water Co. Ltd. (CWCO) is a tiny company, with a market cap of only $172mm. As of its latest quarterly report ending Q3 2013, Consolidated Water was trading at 0.8x the value of net working capital. Over the past few years, CWCO has traded well under book value, but remains a small, relatively undiscovered stock. For those looking to diversify into a teeny utility company, Consolidated Water is certainly worth a look.

The stock is much more volatile than most utilities. Consolidated Water’s high beta of 1.5 is surprising, but not necessarily a deterrent. The high beta may be attributed to the small size of the company, enabling any investor with substantial buying power to push the stock up or down. The stock prices of significantly larger utility companies like American Water Works (AWK) and California Water Service Group (CWT) fluctuate much less, with lower betas of 0.29 and 0.42, respectively.

Other fundamentals that provide key insights are the P/E around 15 and the percentage of institutional ownership at 49%. As with other companies in the water supply sector…

—> To continue reading, please see the article on Seeking Alpha, where it was published. 

Leave a Reply

Your email address will not be published.