Sunday, September 7, 2014

Seeking Alpha: Mueller Water Products Showing Signs Of Real Recovery

Prior to a very strong August, the past six months finally saw Wall Street lose some of its ardor for water and flow control companies like Xylem (NYSE:XYL) and Mueller Water Products (NYSE:MWA). I did think that Mueller Water looked a little pricey on the fundamentals back in March, but I didn't expect the Street to ditch housing and water plays like Mueller just because of valuation. While the shares are down about 4% from my March article, it was actually quite a bit worse than that (a 20% drop) before a strong recovery after fiscal third quarter earnings.

Even though Mueller has lagged the S&P 500 by more than 10% over the past six months, that comes after a good run of performance and the shares aren't exactly strikingly cheap unless you're willing to go along with double-digit forward EBITDA multiples and aggressive assumptions regarding future cash flow. I do like this business, and it looks like both municipal spending and land development activity are improving.

Follow this link to the full article:
Mueller Water Products Showing Signs Of Real Recovery

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