Maybe Zurn Water Solutions (ZWS) isn’t exactly a unicorn stock, but it’s an under-followed water-focused company that has line-of-sight to excellent margins and above-market growth that is still trading below fair value.
With leverage to strong institutional spending, improving commercial activity, and healthy residential activity, not to mention a richer mix of more advanced solutions (leak detection, IoT, BrightShield hygiene solutions, et al), I like the prospects for ongoing above-market growth. Add in the acquisition of Elkay and the leverage to more growth opportunities in drinking water (as well as cost synergy opportunities and increased scale), and the outlook gets better.
Although Zurn doesn’t look “can’t miss” cheap to me today, and there’s a risk of further sentiment erosion in the once-popular water space, I do find a lot to like here.
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Zurn Water Solutions - Maybe Not A Unicorn, But Definitely A Thoroughbred
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