This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

20 Stocks That Are Running on Water

Editor's Note: Jon D. Markman writes a weekly column for CNBC on MSN Money that is republished here on TheStreet.com.


Biotech, energy, steel and semiconductors have charmed investors with their muscular start to the year. But there's one little group that has paradoxically been on fire this year, and it may be the most liquid investment opportunity in the world.

With an introduction like that, you just had to figure that I am referring to the most humble natural resource in the world, and that is water.

Did I say humble? Maybe not so much anymore. A brand-new exchange-traded fund designed to track the performance of water stocks, the PowerShares Water Resource Portfolio (PHO) -- which tracks the PowerShares Palisades Water Resource Index -- is up a whopping 15% so far in 2006.

That swamps the performance of the red-hot AMEX Biotechnology Index, up 8% this year; the Philadelphia Semiconductor Sector Index, up 6%; the iShares Dow Jones U.S. Basic Materials Sector Index, up 3%; and the 2% advance of the iShares U.S. Energy Sector Index. And if your mom ever told you that clean water was as precious as gold, she was at least right this year, as the Philadelphia Gold and Silver Sector Index is only up 3%, or five times less than water.

The Must-Have Commodity

What's behind the move? A key attraction of water as an investment is that demand is accelerating and is not affected by inflation, recession, interest rates or changing tastes. You can live without steel. You can live without oil. You can live without gold. But try living without water, and you won't last too long. About eight to 10 days, by most estimates.

The problem is not that the world is running out of water. Scientists seem to agree that there is pretty much the same amount of water on the surface of the planet now as there was 10 million years ago, as physical forces ranging from respiration to precipitation replenish the supply and maintain hydrobalance. No, the problem is that drinkable surface water is increasingly polluted because of the urbanization of rural areas and industrial farming, particularly in the developing world and China. And all the while, there are simply a lot more people who want a sip.

When you look at the Earth from outer space, you see a lot of water. But less than half of 1% of it is fresh; the rest is either seawater or frozen in the polar ice caps. The United Nations, which will celebrate World Water Day on March 22, reports that the consumption of water worldwide is doubling every two decades -- twice the rate of world population growth. Already, 1 billion people do not have easy access to drinking water. By 2025, the U.N. figures that 2.7 billion people will suffer from severe water shortages.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,677.90 +216.58 1.32%
S&P 500 1,950.82 +23.71 1.23%
NASDAQ 4,452.7920 +69.9450 1.60%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs