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Basin Water Inc. (BWTR): Quenching the Thirst of the West

Basin Water (BWTR) is a designer, maker and marketer of water treatment systems used by utilities, cities, municipalities, special districts, real estate developers, and other organizations for treating groundwater. Major stocks publicly traded for Basin Water include Aqua America Inc. and American States Water Co. Basin Water is looking to expand nationally, with an eye toward the Southwest, particularly the booming population centers of Southern California and Arizona. The company says those areas are expected to add 12 million in population in the next 20 years.

California-based Basin Water makes a market for itself in treating groundwater for consumption, particularly groundwater that has become a primary source of drinking water for many people living in the Southwestern and Western United States. The company’s proprietary ion-exchange system treats groundwater contamination at the wellhead. It offers three ion-exchange treatment systems, including on-site regeneration systems, off-site regeneration systems, and disposable resin systems. Basin Water markets its products through a direct sales force, independent contractors, and strategic relationships throughout the U.S.

Basin Water’s major competitors include Pall Corp., the privately held Severn Trent Plc, and Siemens Water Technologies. Basin Water appears to be growing at a faster clip than both its peers and the industry as a whole, with an almost 86 percent increase in quarterly revenues compared to just under 10 percent for the industry. In comparison, Pall’s sales rose by just under 12 percent in the most recent quarter. The most recent analyst recommendation for Basin Water came from the brokerage firm Janney Montgomery Scott with a rating of “buy” and a price target of $5.

Basin Water shares closed Tuesday at $2.17 and have traded between $1.29 and $13.42 over the past 52 weeks. The company, which was founded in 1999, has a market value of $47.7 million. Earlier this week, Basin Water said announced that it has acquired the bioreactor and biofilter business of Shaw Environmental & Infrastructure, Inc. for $1.5 million.

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