Key insights
- The author expresses concern about water utility companies, noting their underperformance since 2020 after a period of strong growth. They highlight negative free cash flow due to infrastructure investments and question the timing for re-entry into these stocks. The post suggests caution regarding the sector's current valuation and future prospects, implying a slightly bearish outlook.
These have done nothing but decline since 2020. If I ask Gemini about them, it will say it’s like a safe bond that gives a dividend but I think that’s extremely flawed because these companies had massive returns from 2012 to 2020, like x4. Awr, msex, awk, whatever, theres so many and if you invested in 2012 you did really well. So obviously at some point in the future these should return money… they’re mostly all free cash flow negative due to infrastructure build out. So how do you know when to buy into these names?