Tag - Wts

Companies that manufacture drilling equipment are gushing earnings because of drilling activity fueled by record oil prices. T-3 Energy Services, Inc. (NASDAQ:TTES) manufactures so-called blowout preventers (BOPs) used on wells to prevent disasters. Circor International (NYSE:CIR) produces a variety of valves used on oil and gas wells and pipelines. 

T-3 recently shifted its focus from rebuilding and servicing other companies’ equipment to manufacturing its own equipment. This strategy shift was in response to customer requests. Its drilling customers desperately needed more subsea blowout preventers but were experiencing lengthy delays on new orders. BOPs are car-sized valves installed on wellheads that instantly seal off the well when excessive pressure is detected. T-3 added these devices to its product line last year by acquiring Energy Equipment and HP&T Products, two related companies that manufacture deep sea BOPs and related equipment. These acquisitions gave T-3 access to new technologies and markets and manufacturing capabilities at 21 locations across North America.

The company is benefiting from robust demand for its blowout preventers. Sales grew 33% last year to $217.4 million, from $163.1 million in 2006, while net income jumped 40% year-over-year to $25.3 million, or $2.15 per share, from $18.1 million, or $1.71 per share. With drilling activity on the rise, demand for blowout preventers continues to expand. China and Russia are expected to deploy 200 new drilling rigs per year over the next several years, and an additional 149 new offshore rigs are scheduled for delivery between 2008 and 2011...

Water quality product supplier Watts Water Technologies Inc. (NYSE:WTS) is up 11% in today’s trading after announcing after the close on Thursday its second-quarter earnings would beat analyst expectations. For the quarter ended June 29, Watts expects earnings per share of $0.52 to $0.54 on revenues of $389 million. Wall Street is expecting $0.41 per share on revenues of $344.3 million. Watts Water will report earnings on July 29.

In today’s trading, shares of North Andover, Mass.-based company is trading at $27.07, up $2.61 from Thursday’s close. Trading volume has soared to nearly 1 million shares, up from the average of 600,000.

At Circor International (NYSE:CIR), the bread and butter is fluid-control systems, and over the past two years the Massachusetts company has provided investors a steady stream of earnings improvement — not to mention a stock price that has doubled.

The stuff that Circor International makes can’t be called sexy, unless you think consistently turning a profit is racy. Circor has a line of industrial products that can’t be stuffed into a bikini or Speedo in some exotic clime, but its catalog is stuffed with items used in food, petrochemical and pharmaceutical production, military and aerospace applications, and textiles and paper manufacturing.

Circor’s stock has shown that it can weather the chill of a slowing economy or the withering heat from demanding investors. Now the maker of valves, pumps, fittings and specialty devices is striving to consistently grow.

That’s likely where the “International” in its name will come into play, as Circor goes ever more global. And, borrowing a line from Buzz Lightyear, its products are taking journeys to infinity and beyond, on Chinook and Osprey helicopters and Ariane rocket-launching craft.

Shares hit an all-time high of $53.99 on Tuesday, after sinking to a 52-week low of $35.48 on Jan. 23. At Wednesday’s closing, shares of Circor International were at $52.88.

Analysts have taken a wait-and-see approach on Circor, with five of the six surveyed by Thomson Reuters rating shares a “hold” (with one at “strong buy”). The median price target at Thomson calls for $55 a year out.

Circor International was formed in 1999, when Watts Water Technologies, Inc. (NYSE:WTS) spun off the part of its valve and controls business focusing on oil and gas to shareholders. The bulk of Circor’s operations are spread across the United States, but it has a healthy presence in Canada, Europe and China.

Circor’s product array falls into two segments: instrumentation and thermal fluid, and energy products. Whether a part is needed to function in cryogenics or the . . .

Mark Twain used to have a saying about the quest for water sources during the pioneer days of the Wild West: “Whisky is for drinking while water is for fighting over!” In the case of China, though, the writer’s adage could now easily be: “Water is for investing.”  

China is spending billions to prevent a water shortage crisis brought on by its scarce natural endowment, with the deficiencies made worse by its phenomenal economic growth and terrible pollution. While it ranks sixth in the world in terms of total water resources (with around 2,805 billion cubic meters), China’s per capita water resources are only 28% of the world’s average and among the lowest 13 countries in the world.

The shortages are even more overwhelming when considering how much is actually usable.

According to the Chinese Ministry of Water Resources, only slightly more than a third of the 2,805 billion cubic meters of water are utilizable. In fact, 400 of China's more than 600 cities lack water, 110 of which are in particularly short supply. Pollution has made the situation worse, with close to two thirds of China’s drinking ground water quality severely contaminated. Considering that Chinese water consumption is growing at around 10% a year, the country definitely has staggering water problems.

To address these challenges, the Chinese government is going on a major water spending spree. Between 2006 and 2010, it plans to spend around RMB 1,000 (US$133 billion) to build sewage pipes and new waste treatment and water supply facilities. The result, of course, are major investment opportunities.