Tuesday, January 17, 2017

Verbio Moves Its Target

Last week German biofuel producer Verbio Vereginigte BioEnergie AG (VBK:   DE) announced expectations for higher sales and earnings in the second half of its fiscal year ending June 2017.  Management’s optimism is apparently being fed by excellent performance in the second fiscal quarter based on solid plant utilization and favorable raw materials prices.  Investors will have to wait until February 9th to see the actual numbers.  Verbio will not be releasing details until then. 
Verbio is an interesting nugget for investors with a taste for renewable energy investment.  No better time to enter a new position than with a wave of growth.  In the most recently reported twelve months Verbio earned EUR 656.9 million (USD 702.0 million) in total sales, providing EUR 48.3 million (USD 51.6 million) in net income.  Cash flow generated by operations is perhaps more interesting at EUR 63.9 million (USD 68.33 million).  This represents a sales-to-cash conversion rate of 9.7%, a record that should impress investors.

Friday, January 13, 2017

Shining up the Pipes

Steel fabricators are putting a shine on their pipes following passage of the WIIN Act of 2016, providing new federal financial support for water systems infrastructure.  Steel is one of several materials used to fabricate water mains and pipes to transport potable and waste water.  The invention of the Bessemer process and the adoption of open hearth furnaces for making steel in the mid-1800s helped make steel a viable alternative to the wooden pipes that had been used in water systems.  Over the years rivets were replaced by welding and other fabrication efficiencies developed that have given steel a significant share of the installed water system infrastructure.

Tuesday, January 10, 2017

Pipe Dreams

Voted into law in the weeks before the recent Christmas Holiday, the WIIN Act of 2016, providing financial support for water systems infrastructure, may have caused water pipe manufacturers to dream of pipe fittings instead of sugar plums.  For more details on the WIIN Act see the recent post 'WIIN in Water Pipelines" on January 6, 2017 Producers of iron pipes might be especially happy to see surge in water pipe spending after losing market share to vinyl pipe alternatives for the last several years. 
Image result for ductile pipe image
Prominent among the iron pipe manufacturers in the U.S. are several private companies:  McWane Ductile and American Cast Iron Pipe.  There is one new publicly traded company in Forterra with its newly acquired U.S. Pipe and Foundry subsidiary. 

Friday, January 06, 2017

WIIN in Water Pipelines

The pun is fully intended.  Water Infrastructure Improvements for the Nation Act of 2015, set goals and made appropriations for improvements in the U.S. water supply system and water transportation facilities.  Called WIIN for short it is expected to deliver an economic impact of over $18 billion through federal government spending on water-related systems design, engineering and construction.  Granted most of those monies are intended for infrastructure at U.S. ports, harbors and other waters important to shipping, but at least $2 billion is indeed in the ‘pipeline’ for projects to make our drinking water safe and leave us less susceptible to drought conditions.
With an infusion of new investment in water systems, it seems like a good time to invest in the companies that will benefit from expanded and accelerated orders for the pipes, fittings and materials that are needed to fill consumers’ water glasses.  We begin a new series on water system components suppliers.