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Peter Brieger Veolia Environnement VE-N DON'T BUY Apr 25, 2012

Management has screwed things up and this is one you don't want to get into. It has always been thought of as a water stock but only 30% of its business is in water. 70% of its business is in Europe. If you are interested in water, look at Ecolab (ECL-N), Xylem (XYL-N) or Tetra Tech (TTEK-Q).

Peter Brieger

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$14.370

Stock price when the opinion was issued

environmental

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BUY

(Market Call Minute.) This is a cyclical recovery in the economy as well as a secular recovery.

BUY

Water treatment. Cities outsource to this company. Infrastructure play.

BUY

Large French utility that specializes in water treatment, provision of water to households, water plants and waste management. This is a sector that has not participated in the market rally. Well managed.

WEAK BUY

Weak euro should help their revenue as a lot of it is earned outside of Europe. Not a huge growth play. Pretty solid dividend yield.

BUY

French environmental company with water (35%), energy services, transportation and waste management. Had a lot of debt and new management is trying to bring it down. Reducing costs and selling off non-core assets. Lower margins in the water business. Europeans are liberalizing their rail business in 2012, which should help them. Good entry level.

DON'T BUY

Announced they were going to do a reorganization about a month ago and recently announced they would have to take an €800 million hit this year. Doesn't think there is any hope for the dividend being maintained.

COMMENT

Waste management, water, etc. 70% of its business is in Europe, most of which is France. Prefers something more broadly diversified on a global basis. If you own, consider switching into his Top Pick.

COMMENT

Just did a complete reversal from a massive empire building by the previous management. This is probably a good thing but the dividend has now been cut. New management is on trial for the future.

DON'T BUY

Really suffers by virtue of being a European large-cap. Because of the debt level and high dividend payout ratio, there is some concern as to whether or not the dividend is sustainable. Too early to get into this name.

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Peter Brieger Veolia Environnement VE-N DON'T BUY Apr 25, 2012

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