Should water stocks be part of your investment allocation? Deane Dray, senior industrial analyst at FBR Capital Markets, shared his insights.
“There’s no question that water has hit all the industrial, geopolitical, humanitarian agendas because of worsening supply-demand issues,” Dray told CNBC.
Dray said investors should focus on the "high end" of water technology.
“We’re not interested in pumps, valves and pipes,” he said.
“So instead, focus on businesses that address high end of water technology—things like desalination, filtration, ultra-filtration, water test, and then focus on which companies are best in breed.”
Additionally, Dray said the water infrastructure in the U.S. needs to be upgraded, which makes water stocks even more look attractive.
- Watch Dray's Previous Appearance on CNBC (Feb. 4, 2010)
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Dray does not own shares of Danaher, Pall or Calgon Carbon.