Drought effects increase water tech companies’ stocks

June 9, 2015

NEW YORK — Analysts believe the growth will continue even when the drought ends.

NEW YORK — Several water technology businesses have experienced an upsurge in shares in the midst of severe drought in places like California, according to Reuters.com.

Ecolab Inc., Roper Technologies and Flowserve Corp. have also seen fund managers increase their stakes in their companies, stated the article. Analysts believe the growth will continue even when the drought ends.

"It's clear that water scarcity is only going to increase, and we think that there will be a several-year investment cycle as homes and businesses look at ways to maximize the water they do have," said Pete Johnson, an analyst at the Mairs & Power Growth fund, in the article.

As stocks increase, active and passive funds are struggling because of concern related to utilities and mandatory statewide restrictions, reported the article. Funds benefiting include those not solely focused on water, like the Mairs & Power Growth fund.

Many homeowners in California pay a flat fee for water, but once their usage is monitored, they typically cut consumption by up to 20 percent, reported the article. This presents a growth opportunity to companies that supply meters and software.

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