For some time now, my refrain on water-leveraged industrials has been
iterations of “yes, this is a good sector to be in long term, but the
valuation more than reflects that”, and the sector has definitely pulled
back and derated
recently. Badger Meter (NYSE:BMI) has been caught up in that, with the shares underperforming since my last update; underperforming the broader industrial space by about 15%, as well as other water plays like Mueller (MWA) and Franklin (FELE), though outperforming Xylem (XYL). As
I’ve said in other articles, I don’t believe that all water exposure is
equal, and I think Badger is in some of the best places to be,
including water quality and loss mitigation. Even so, I can’t make the
valuation work at this level and it’s hard to recommend this name over
some other companies in the water space with more reasonable valuations.
Read more here:
Badger Meter In The Right Water Markets, But The Valuation Is Steep
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