The latest Newsweek has an article painting a grim picture for California water supply. There is only one year of water left in the California water supply. Here is a quote from NASA….
"Plagued by prolonged drought, California now has only enough water to get it through the next year, according to NASA."
Yes, California is in a severe drought, and water is a precious commodity. The rainfall this year was actually a bit better than the past three years. However, it is not nearly enough to satisfy the water needs of the state.
AWR is already sporting a pretty rich premium for a utility company at 25. I am long, and would be happy if the stock hovers around $40-$45 this year
indicators snow fall is super low, and i mean very low, and now heatwave starting. Before summer even starts some towns in CA may run out of water...this will be major news event this summer. AWR could rush to $55....buy before news picks up the story!!!
Well, that did not last very long! AWR popped well above its 10 week line today. The stock was under the key technical level for a grand total of four days. This stock is showing strength because of its balance sheet, solid earnings, and increasing dividend.
AWR is currently trading below its 10 week line. Every time the stock has done that the past few years it has been a buying opportunity. Will this time be different? With solid earnings and increasing dividends; I doubt it!
AWR is a buy under $39!
There is a lot to like in AWR as a long term investment. They have a long track record of increasing earnings, and steady EPS reports. I expect the stock to hover around $40 for some time. But, over the long haul (5-10 years) I expect AWR to outperform the indexes by a good margin.
They will have the ability to increase rates (no utility ever goes down) in the future and grow their business at a gradual but steady pace. The firm has a market cap of $1.5 billion and I would expect that to increase in the future.