Wednesday, February 25, 2009

Insituform Technologies (INSU) in Forbes

Insituform Technologies (INSU) is getting a lot of nice press of lately[Feb 10: Insituform Technologies with Favorable Mention in Investor's Business Daily] but it is not helping one bit. The two acquisitions have created a serious overhead [Feb 2: Bookkeeping - Beginning Insituform Technologies] and thus far this has been a loser for us. Although the stock prices is depressed, I just don't see a catalyst to add to the position even if the stock is dirt cheap. I love this technology but right now I seem to be alone. Technically, it's just ugly right now.

Latest article via Fortune
  • Imagine having to dig up and replace the current clean water piping system under Madison Avenue in Manhattan. The traffic, the noise, the chunks of rubble and the cost would be a nightmare. Insituform Technologies (nasdaq: INSU - news - people ) has an alternative solution that avoids the mess, hassle and costs. Simply put, the company places a tube inside a pipe and inflates the tube, which hardens and seals to the pipe, fixing any cracks.
  • To find out where pipes need repairs, Insituform unleashes little robots that crawl into the sewage or water mains. The robots take pictures, monitor the systems and collect data on where the fixes are needed. Another robot feeds a deflated tube into the pipes that need repairs. Once the tube has inflated and seals any cracks, the pipes can be filled with water again.
  • Insituform's water rehabilitation technology is pricey--about $125 per foot for an eight-inch pipe--but well within the average range of $50 to $250 a foot to dig up and replace pipes. For 2007, Insituform reported net income of $2.5 million on revenues of $495.6 million. The company is expected to report 2008 results Thursday.
  • Lux Research analyst Mike LoCascio estimates the so-called trenchless water pipe rehab industry is a $3 billion market that could more than double in size by 2020. Insituform is expanding to seize opportunities in the sector.
  • "The infrastructure in this country is only getting older and worse," LoCascio says. "There are reports every day of lead leaching into water. The 150-year-old water pipes under Wall Street are made out of wood! Insituform is a stalwart in the business, providing cost effective solutions with impressive revenues. They have a real chance for growth on the water main side."
Long Insituform Technologies in fund; no personal position

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