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Stockchase Opinions

Kevin O'LearyVeolia EnvironnementVETOP PICKAug 25, 2008

Really interesting entry opportunity. This is water and water is the next oil. Infrastructure with a yield of 3.6%.
$54.34

Stock price when the opinion was issued

environmental
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DON'T BUY
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).
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.
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.
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.
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.
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.
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
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.
BUY
Water treatment. Cities outsource to this company. Infrastructure play.
BUY
(Market Call Minute.) This is a cyclical recovery in the economy as well as a secular recovery.
PAST TOP PICK
(A Top Pick Aug 25/08. Down 63%.) Sold this in the mid-$40’s because management missed its numbers.
DON'T BUY
French company primarily dealing in sewage treatment as well as water facility treatment. Underwent a period of expansion in the last couple of years fuelled primarily by debt. When the credit crisis began they had significant trouble. 9% yield seems awfully high. A lot of uncertainty at these levels.
PAST TOP PICK
(A Top Pick Aug 25/08. Down 61.2%.) Still watching this as it is in a great theme that he loves, water. Have had some really big missteps in management.
PAST TOP PICK
(A Top Pick Aug 25/08. Down 52%.) A fundamental play on water. Management disappointed on the dividends so he sold his holdings. On his Buying screen but is waiting a couple of quarters to see what they do. Yield of over 8%.
PAST TOP PICK
(Top Pick Aug 25/2008, Down 25%) Management missed. Going to buy it again, but no rush and see management stabilize. Expects new management. Core asset is water and was always there.