Earlier this year, the World Economic Forum listed water crises as the main global risk for the next ten years. It appears that the world is losing the battle for an extremely necessary natural resource, namely water. Mario Gabelli, the Chief Executive Officer of GAMCO Investors, revealed earlier this year that he was particularly interested in the water segment within the broader utilities sector. With water coming out as the number-one global concern in the years ahead, retail investors seeking to get exposure to the relatively safe, somewhat boring and income-paying public utility sector should definitely have a look at water utility stocks. Grim outlooks about an imminent increase in scarcity for this sought-after and crucial natural resource, as well as higher instances of contaminated public water supplies, will make the water sector even more appealing among both larger-scale investors and smaller-scale retail investors. For that reason, Insider Monkey decided to compile a list of five water stocks favored by the hedge funds tracked by our team.
At Insider Monkey, we track around 770 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).
#5. York Water Co (NASDAQ:YORW)
– Investors with long positions as of March 31: 6
– Aggregate value of investors’ holdings as of March 31: $13.35 Million
There were six hedge funds followed by Insider Monkey invested in York Water Co (NASDAQ:YORW) at the end of the March quarter, as compared with only four registered at the end of the previous quarter. Meanwhile, the overall value of those funds’ equity investments in York Water rose by nearly 39% quarter-over-quarter to $13.35 million, partially due to a 22% increase in the value of York Water shares. York Water, whose primary business involves impounding, purifying and distributing water, has seen its market value gain 25% since the beginning of 2016. The company reported operating revenues of $11.28 million for the first quarter of 2016, which marks an increase of $69,000 year-over-year. The increase was driven by a higher number of customers, as well as higher revenue from sewer billing and collection services. York Water paid a cash dividend of $0.1555 for the first quarter of 2016, which equates to an annual dividend yield of 2.08%. Royce & Associates, founded by Chuck Royce, owned 166,630 shares of York Water Co (NASDAQ:YORW) at the end of March.