Conrad: Keen on Kelda

01/09/2004 12:00 am EST


Roger Conrad

Chief Analyst/Managing Partner, Capitalist Times

Utilities were once considered a "widows and orphans" sector. But regulatory and operating changes in various energy, telecom, and water markets have made this a volatile area, with both added risk and growth potential. No one is better suited to navigate these waters than Roger Conrad, editor of The Utility Forecaster.

"The cost of clean water is rising in Britain and the US, and our new core portfolio holding, Kelda Group (KELGF Other OTC) is poised to profit on both sides of the pond. Its Yorkshire Water unit serves 4.5 million people and is consistently rated highly by regulators for efficiency and quality.

"In the US, it serves some 211,000 accounts in Connecticut, Maine, New Hampshire, and New York from the purchase of Aquarion in 2000 and American Water Works’ systems last year. The company also makes a tidy business in the US in operating municipally owned systems in New England under contract. Profits from that operation have surged to the extent that they’ve been offsetting poor water conditions in the region in recent months.

"Unlike most US water utilities, Kelda is cheap, selling for barely 11 times projected fiscal 2004 earnings, barely book value and a yield of nearly 6%. There are no American Depositary Receipts, but investors can buy the stock over the counter on the US pink sheets (at prices up to $8.50) or through the ordinaries which trade on its home London exchange."

Roger Conrad will be participating in Investing for Growth & Income at The World Money Show in Orlando, Florida, February 3, 2004. Tickets are $89.00 through January 22, $109.00 afterwards. Click here for more information or to purchase tickets.

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