Consolidated Water Co. (NASDAQCWCO)
Consolidated Water Co is a Good Penny Stock to Buy
Consolidated Water Co. (NASDAQ:CWCO) works and creates desalination plants, and additionally water circulation frameworks all through the Caribbean and Indonesia. Their business works crosswise over three fragments: benefit operations – giving bolster administrations to outsiders and to business subsidiaries; retail operations – where water is sold straightforwardly to clients (fundamentally resorts and apartment suites); and mass water operations – where water is sold to utilities which then disseminate voluntarily (Capital IQ).
Combined Water Co. presently has a selective permit to give two of the three most vigorously populated locales of the island (which is right now in restoration arrangements), Seven-mile Beach and West Bay (CWCO Annual Report, 2015). This select administration right joined with a specialty showcase center gives the organization relative security against the risk of new participants. Safety to rivalry is something I, and other esteem speculators search for in deciding the appropriateness of a venture.
With a present market capitalization of $194 million, and right now just $7 million in remarkable obligation – planned to be paid this May (Annual Report) – they are essentially value financed. This is an awesome position for the organization to be in as they hope to extend. Obligation will be less expensive, and they can stand to influence themselves to a much bigger degree than the individuals who are now vigorously utilized. This additionally essentially lessens or takes out any dangers of bankruptcy.
In spite of the focuses specified over, this business is not without its dangers and disadvantages. Merged Water Co. will more than likely be liable to profit tops for the retail side of their business upon the re-arrangement of the agreement with the administration. Return tops are something utilities around the globe are liable to, keeping the utilities from exploiting predominant market positions.