Splish Splash

I’m decidedly negative on the market, but I always have a positive bias when looking for stocks. After seeing an odd upgrade on a company I’ve been tracking for a few years, I took a closer look. Buy Aqua America (WTR) (around 21 if possible) if you want a good solid long term stock.

Why buy the largest water utilities company? UBS initiated WTR at a buy on September 22^nd, making five consecutive analysts buy signals since the stock dropped to its low this May.

Here is a map from the UN website showing projections for future clean water.
When the two most populated countries in the world have a hard time finding clean water, you have an opportunity to profit.

But wait, Aqua America is only in the U.S. so how can they supply India? This is true, and it gives me more reason to suggest the highest market cap water company. WTR will have enough capital to be able to grow into other countries when the time comes.

This all seems so far in the future, but to an investor’s retirement account 15-20 years is just right. Again I am suggesting this stock as a long term buy.

Lets take a look at the charts:

• Daily-The stock price remains at 21.5 while the MACD has risen near the 0 line. A trend with the Slow STO is telling the stock to bounce at levels below 20.
  

• Weekly- WTR has a 200 week MA at 18.5. This support level is too strong for WTR to fall below.

So what’s the drawback? The problem with most water companies are that they look overvalued. WTR has a PEG ratio over 2. Ouch. It seems investors have already come to the conclusion that water is a good investment. If you think that WTR needs to pull back before you buy, believe me when I say that this baby will bounce on its 200Week MA (if it actually drops to that level).