Group 1 - The average brokerage recommendation (ABR) for Consolidated Water (CWCO) is 1.67, indicating a rating between Strong Buy and Buy, with 66.7% of recommendations being Strong Buy from three brokerage firms [2][5] - Brokerage recommendations have been shown to have limited success in guiding investors towards stocks with significant price appreciation potential, suggesting caution in relying solely on these ratings for investment decisions [5][11] - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, with five "Strong Buy" recommendations for every "Strong Sell," indicating a misalignment of interests between brokerage firms and retail investors [6][11] Group 2 - The Zacks Rank, a proprietary stock rating tool, categorizes stocks from Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell) and is based on earnings estimate revisions, which have a strong correlation with near-term stock price movements [8][12] - The Zacks Rank is distinct from the ABR, as it is a quantitative model that reflects timely earnings estimate revisions, while the ABR may not always be up-to-date [9][13] - For Consolidated Water, the Zacks Consensus Estimate for the current year remains unchanged at $1.24, leading to a Zacks Rank 3 (Hold), suggesting a cautious approach despite the Buy-equivalent ABR [14][15]

Company Overview - Consolidated Water Co. is involved in the development and operation of seawater desalination plants and water distribution systems in areas with limited potable water supplies [12] - The company focuses on expanding operations in regions with a high proportion of tourist properties and growing populations [12] Zacks Rank and Style Scores - CWCO is currently rated as 3 (Hold) on the Zacks Rank, with a VGM Score of B [13] - The company has a Momentum Style Score of A, indicating strong recent performance, with shares up 5.5% over the past four weeks [13] - For fiscal 2025, three analysts have revised their earnings estimates upwards in the last 60 days, increasing the Zacks Consensus Estimate by $0.11 to $1.24 per share [13] - CWCO has an average earnings surprise of +47.5%, suggesting strong performance relative to expectations [13] Investment Consideration - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, CWCO is recommended for investors' short lists [14]

Core Insights - The article emphasizes the importance of utilizing Zacks Premium for investors to enhance their stock market strategies and confidence in investing [1][2] Zacks Style Scores - Zacks Style Scores provide a rating system for stocks based on value, growth, and momentum, aiding investors in selecting securities with high potential for market outperformance over the next 30 days [3][4] - Stocks are rated from A to F, with A indicating the highest potential for outperforming the market [4] Value Score - The Value Style Score focuses on identifying undervalued stocks by analyzing financial ratios such as P/E, PEG, and Price/Sales [4] Growth Score - The Growth Style Score assesses stocks based on projected and historical earnings, sales, and cash flow to identify those with sustainable growth potential [5] Momentum Score - The Momentum Style Score evaluates stocks based on price trends and earnings outlook changes, helping investors identify optimal buying opportunities [6] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors who want to consider value, growth, and momentum simultaneously [7] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors in building successful portfolios, with 1 (Strong Buy) stocks achieving an average annual return of +23.93% since 1988, significantly outperforming the S&P 500 [8][9] - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B to maximize returns [10] Stock to Watch: Consolidated Water Co. (CWCO) - Consolidated Water Co. operates seawater desalination plants and water distribution systems in areas with limited potable water supplies, focusing on regions with high tourist properties and growing populations [12] - CWCO holds a Zacks Rank of 3 (Hold) and has a VGM Score of B, with a Momentum Style Score of B, indicating potential for upward movement [13] - The company has seen upward revisions in earnings estimates, with the Zacks Consensus Estimate increasing by $0.12 to $1.24 per share for fiscal 2025, and an average earnings surprise of +47.5% [13][14]

Core Insights - Consolidated Water Co. Ltd. (CWCO) reported third-quarter 2025 earnings per share (EPS) of 34 cents, exceeding the Zacks Consensus Estimate of 24 cents by 41.67% and improving 9.67% from the previous year's EPS of 31 cents [1][7] - Total revenues for the quarter reached $35.1 million, surpassing the Zacks Consensus Estimate of $33 million by 7.07% and reflecting a year-over-year increase of 5.1% from $33.4 million [2][7] Revenue Breakdown - Retail revenues increased by 2.6% to $7.8 million due to higher sales volumes [3] - Bulk revenues decreased by 4.5% to $8.4 million, attributed to a decline in energy-related revenues in the Bahamas [3] - Manufacturing revenues rose by 6.8% to $4.7 million [3] - Services revenues grew by 12.7% to $14.3 million, driven by a 50% increase in construction revenue to $6.4 million and a 3% rise in revenues from operations and maintenance (O&M) contracts [3] Operational Highlights - The Grand Cayman utility experienced a 6% increase in retail water sales, influenced by lower rainfall compared to the same quarter in 2024 and an increase in service connections [4] - The company secured two water treatment plant construction projects valued at approximately $15.6 million, with revenues expected to be realized in 2026 [5] Financial Performance - Gross profit for the third quarter was $12.95 million, an increase of 11.21% from $11.63 million in the same quarter of 2024 [5] - General and administrative expenses rose nearly 4.3% to $7.2 million [5] - Cash and cash equivalents totaled $123.6 million as of September 30, 2025, compared to $99.4 million at the end of 2024 [6] - Total long-term debt was $0.03 million as of September 30, 2025, down from $0.07 million at the end of 2024 [6] Cash Flow - Cash flow from operating activities for the first nine months of 2025 amounted to $35.9 million, compared to $37.2 million in the same period of the previous year [8] Market Position - Consolidated Water currently holds a Zacks Rank 2 (Buy) [9]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 totaled $35.1 million, a 5% increase from $33.4 million in Q3 2024, driven by retail services and manufacturing segments [7][10] - Net income from continuing operations was $5.6 million, or $0.34 per diluted share, compared to $5 million, or $0.31 per diluted share in Q3 2024 [10] - Gross profit increased to $12.9 million, representing 37% of total revenue, up from $11.6 million, or 35% of total revenue in Q3 2024 [9][10] Business Line Data and Key Metrics Changes - Retail water sales in Grand Cayman increased due to economic strength and drier weather, leading to higher demand and sales volume [3] - The bulk segment revenue decreased to $8.4 million, down from $8.8 million, primarily due to lower fuel-related charges [4][8] - Services segment revenue rose by $1.6 million, driven by plant construction revenue increasing from $4.3 million to $6.4 million [9] - Manufacturing segment revenue increased by 7% to $4.7 million, attributed to higher production activity [9] Market Data and Key Metrics Changes - The Caribbean-based bulk segment saw a modest decline in revenue but improved profitability due to cost reductions [4] - Increased bidding activity for municipal water projects in Florida is noted, driven by significant population growth and regulatory changes [16][17] Company Strategy and Development Direction - The company aims to enhance its diversified business model across four segments to deliver long-term superior returns [21] - Focus on ongoing construction projects in the U.S. and increased project opportunities in Florida is emphasized [21] - The completion of a new manufacturing facility expansion is expected to improve efficiency and throughput [5][15] Management's Comments on Operating Environment and Future Outlook - Management is optimistic about continued growth due to strong performance in Grand Cayman and ongoing construction projects [21] - Anticipation of significant revenue and earnings growth from the Honolulu desalination project, with construction expected to commence early next year [6][18] - The company is evaluating how to utilize its ample cash balances to increase shareholder value [11] Other Important Information - New independent directors were appointed to strengthen corporate governance and expertise [19][20] - The company has no significant outstanding debt, with cash and cash equivalents totaling $123.6 million as of September 30, 2025 [11] Q&A Session Summary Question: Update on Hawaii project permits - The archaeological permit is crucial and has more discretion than subsequent administrative permits, which are more administrative in nature [27][28] Question: Construction cadence for Hawaii project - A typical construction project cadence is expected, with a ramp-up period for site clearing and material ordering [29] Question: Increase in Arizona CDR activity - Increased activity is attributed to the sales team's entrenchment in Arizona and the demand for cost certainty from developers [30][31] Question: Manufacturing facility expansion impact - The expansion significantly improves workflow and allows for simultaneous management of multiple projects, enhancing overall capacity [39][40] Question: Future margin expectations - Margins may fluctuate based on product mix, but overall gross profit dollars are expected to improve with the facility expansion [46]

Revenue Performance - Total revenue increased by 5% to $35.1 million compared to $33.4 million in Q3 2024[5] - Retail revenue rose by 2% to $7.8 million, driven by a 6% increase in water volume sold[5][16] - Services revenue increased by 13% to $14.3 million, with construction revenue up 50% to $6.4 million[5][9] - Revenue for the first nine months of 2025 was $102.4 million, a decrease of 3% from $105.6 million in the same period of 2024[21] - Total revenue for Q3 2025 reached $35,118,706, an increase from $33,390,557 in Q3 2024, representing a growth of approximately 5.2% year-over-year[28] - Retail revenue for Q3 2025 reached $7,770,344, a 2.4% increase from $7,585,992 in Q3 2024[32] - Services revenue for Q3 2025 was $14,289,315, a 12.7% increase compared to $12,677,837 in Q3 2024[33] - Total revenue for the nine months ended September 30, 2025, was $102,425,170, down 3.4% from $105,559,105 in the same period of 2024[42] Profitability - Net income from continuing operations was $5.6 million, or $0.34 per diluted share, up from $5.0 million, or $0.31 per diluted share in Q3 2024[19] - Gross profit for Q3 2025 was $12.9 million, representing 37% of total revenue, compared to $11.6 million, or 35% of total revenue in Q3 2024[18] - Gross profit for Q3 2025 was $12,945,909, compared to $11,634,658 in Q3 2024, indicating a year-over-year increase of about 11.3%[28] - Net income from continuing operations for Q3 2025 was $5,745,500, up from $5,114,102 in Q3 2024, reflecting a growth of approximately 12.3%[28] - The company recorded a net income attributable to Consolidated Water Co. Ltd. stockholders of $15,419,578 for the nine months ended September 30, 2025, compared to $26,779,069 in 2024, a decrease of about 42.5%[31] - Basic earnings per share for continuing operations in Q3 2025 was $0.35, up from $0.31 in Q3 2024, representing a growth of 12.9%[42] Expenses and Financial Position - General and administrative expenses for the nine months ended September 30, 2025, totaled $22,522,919, compared to $20,126,292 in 2024, an increase of about 11.9%[29] - Cash and cash equivalents reached $123.6 million, with working capital of $141.7 million as of September 30, 2025[20] - The company reported a decrease in accounts receivable, net, to $28,996,834 in Q3 2025 from $39,580,982 in Q3 2024, a reduction of 26.7%[41] - Total assets increased to $257,234,652 as of September 30, 2025, compared to $243,313,181 as of December 31, 2024, reflecting a growth of 5.7%[41] Projects and Future Outlook - The company secured two water treatment plant construction projects valued at approximately $15.6 million, expected to generate revenue primarily in 2026[5] - The design of a $204 million seawater desalination plant project in Hawaii is now 100% complete, with construction expected to begin once permits are obtained[6][12] - The company is currently engaged in a $204 million design-build-operate project for a seawater desalination plant in Hawaii[35] Other Financial Metrics - Interest income for the nine months ended September 30, 2025, was $2,011,114, compared to $1,341,797 in the same period of 2024, representing a significant increase of approximately 49.8%[29] - The provision for income taxes for the nine months ended September 30, 2025, was $1,832,933, compared to $2,175,838 in 2024, indicating a decrease of approximately 15.7%[29] - The company reported a net loss from discontinued operations of $252,857 for the nine months ended September 30, 2025, compared to a net income of $10,637,926 in 2024[31] - Dividends declared per common and redeemable preferred shares increased to $0.14 in Q3 2025 from $0.11 in Q3 2024, a rise of 27.3%[42]

Core Insights - Consolidated Water Co. Ltd. reported a 5% increase in consolidated revenue for Q3 2025, totaling $35.1 million, and a 10% increase in fully diluted earnings per share from continuing operations, reaching $0.34 [4][12][16]. Financial Summary - Total revenue increased to $35.1 million from $33.4 million in Q3 2024, driven by growth in retail, services, and manufacturing segments [12][31]. - Retail revenue rose by 2% to $7.8 million, while bulk revenue decreased by 4% to $8.4 million [8][31]. - Services revenue increased by 13% to $14.3 million, with construction revenue up 50% to $6.4 million [6][31]. - Manufacturing revenue grew by 7% to $4.7 million, with a gross margin increase to 40% [8][9]. Operational Highlights - Retail water sold increased by 6% due to lower rainfall in Grand Cayman [5][12]. - The services segment saw a revenue increase of $1.6 million, attributed to construction projects and a slight rise in O&M contracts [6][14]. - A new contract valued at $11.7 million was secured for a wastewater recycling plant in California, expected to save significant potable water [7][12]. Management Commentary - The CEO highlighted the strength of the diversified business model, which includes regulated utility operations, design and construction services, and manufacturing [4]. - The company anticipates continued revenue and earnings growth from major projects, including a $204 million seawater desalination plant in Hawaii [10][12]. Balance Sheet and Cash Flow - Cash and cash equivalents increased to $123.6 million, with working capital rising to $141.7 million as of September 30, 2025 [17]. - Net income from continuing operations attributable to stockholders was $5.6 million, compared to $5.0 million in Q3 2024 [16][17]. Segment Results - Retail segment revenue was $7.8 million, bulk segment revenue was $8.4 million, services segment revenue was $14.3 million, and manufacturing segment revenue was $4.7 million for Q3 2025 [25][31]. - The services segment's construction revenue increased significantly, while O&M revenue also saw a modest rise [14][32].

Financial Performance - Revenue for Q3 2025 was $35,118,706, an increase of 5.2% compared to $33,390,557 in Q3 2024[13] - Gross profit for Q3 2025 reached $12,945,909, up from $11,634,658 in Q3 2024, reflecting a gross margin improvement[13] - Net income from continuing operations attributable to stockholders was $5,569,564 for Q3 2025, compared to $4,957,318 in Q3 2024, representing a 12.3% increase[13] - Total revenue for the nine months ended September 30, 2025, was $102,425,170, a slight increase from $105,559,105 in the same period of 2024[62][63] - Gross profit for the nine months ended September 30, 2025, was $38,084,181, compared to $37,132,895 in 2024, reflecting a growth of approximately 2.56%[62][63] - Net income attributable to Consolidated Water Co. Ltd. stockholders for the nine months ended September 30, 2025, was $15,419,578, down from $26,779,069 in 2024, indicating a decrease of about 42.5%[62][63] - Basic earnings per share for continuing operations was $0.35 in Q3 2025, compared to $0.31 in Q3 2024[13] - Net income from continuing operations for 2025 was $5,569,564, or $0.34 per share on a fully diluted basis, compared to $4,957,318, or $0.31 per share for 2024[132] Assets and Liabilities - Total assets increased to $257,234,652 as of September 30, 2025, up from $243,313,181 at the end of 2024[11] - Total liabilities rose to $31,033,818 as of September 30, 2025, compared to $28,003,534 at the end of 2024[11] - Cash and cash equivalents increased to $123,554,648 as of September 30, 2025, from $99,350,121 at the end of 2024[11] - Total stockholders' equity increased to $226,200,834 as of September 30, 2025, compared to $215,309,647 at the end of 2024[11] - The company reported total segment assets of $257,097,724 as of September 30, 2025, an increase from $243,040,696 as of December 31, 2024[66] Cash Flow and Investments - Net cash provided by operating activities for continuing operations was $36,390,479 for the nine months ended September 30, 2025, compared to $38,689,596 for the same period in 2024, indicating a decline of about 6%[19] - The company reported a net cash used in investing activities of $(6,045,599) for the nine months ended September 30, 2025, compared to a net cash provided of $29,960,751 in 2024[19] - Total cash flows from operating activities, including discontinued operations, were $35,932,833 for the nine months ended September 30, 2025, down from $37,257,555 in 2024[19] - The balance of cash and cash equivalents at the beginning of the period was $99,350,121 for the nine months ended September 30, 2025, compared to $42,621,898 for the same period in 2024[19] Dividends and Shareholder Returns - The company declared dividends of $0.14 per common share in Q3 2025, up from $0.11 in Q3 2024[13] - Dividends paid to common shareholders increased to $5,718,080 in 2025 from $4,519,412 in 2024, representing an increase of approximately 27%[19] - The company paid approximately $2.3 million in dividends in October 2025, with future dividends dependent on earnings and financial condition[177][199] Segment Performance - Retail revenue for the three months ended September 30, 2025, was $7,770,344, compared to $7,585,992 in 2024, reflecting an increase of about 2.4%[35] - Services revenue for the three months ended September 30, 2025, was $14,289,315, up from $12,677,837 in 2024, indicating a growth of approximately 12.7%[35] - Manufacturing revenue for the three months ended September 30, 2025, reached $4,664,433, compared to $4,359,560 in 2024, marking an increase of about 7%[35] - Retail segment revenue increased to $25,819,712 in 2025 from $24,392,814 in 2024, reflecting a 9% increase in the volume of water sold[160] - Services segment revenue decreased to $14,289,315 for 2025 from $12,677,837 for 2024, primarily due to a decline in construction revenue[142] - Manufacturing segment revenue increased to $15,708,527 in 2025 from $13,591,154 for 2024, attributed to increased production activity[169] Operational Efficiency and Cost Management - The company continues to focus on operational efficiency and cost management strategies to enhance profitability moving forward[57] - General and administrative expenses for Q3 2025 totaled $7,218,722, compared to $6,955,969 in Q3 2024, marking an increase of about 3.8%[61][59] - General and administrative expenses increased to $22,522,919 in 2025 from $20,126,292 in 2024, representing an increase of approximately 11.9%[64][63] Discontinued Operations - The company reported a net loss from discontinued operations of $37,220 in Q3 2025, compared to a net loss of $502,854 in Q3 2024, indicating an improvement[57][59] - The company reported a net loss from discontinued operations of $252,857 in 2025, compared to a net income of $10,637,926 in 2024[62][63] - The discontinued operations related to the Mexico project reported a loss of $37,220 for the three months ended September 30, 2025, compared to a loss of $502,854 in the same period of 2024[78] Future Outlook and Strategic Initiatives - The company plans to continue pursuing opportunities in the desalination sector, as evidenced by the ongoing developments related to the Mexico project[69] - Future outlook and strategies for market expansion and new product development were not explicitly mentioned in the provided content, suggesting potential areas for further exploration in upcoming reports[62][63] - The company is currently evaluating the impact of new accounting standards issued by the FASB, including ASU 2024-03 and ASU 2025-01, which may affect future financial reporting[98][99]

Market Overview - Wall Street's major indexes have reached multiple all-time closing highs recently, but the market has experienced volatility due to economic uncertainties [1][5] - The tech sector, particularly driven by AI optimism, has seen fluctuations, with significant pullbacks in stock prices due to concerns over high valuations [2][6] Economic Concerns - Investors are worried about the health of the economy, particularly with a shrinking labor market and fewer jobs being added [7] - Layoffs surged in October, totaling 153,074, which is a 183% increase sequentially and a 175% increase year-over-year [8] - The ongoing government shutdown has limited access to fresh economic data, contributing to investor uncertainty [9] Defensive Investment Recommendations - In light of market volatility, it is advisable to consider defensive stocks, particularly from the utilities sector, which are characterized by low beta values and high dividend yields [3][4][12] - Five recommended low-beta utility stocks include: - **Atmos Energy Corporation (ATO)**: Expected earnings growth of 6%, beta of 0.73, and a dividend yield of 2.02% [10][11] - **American States Water Company (AWR)**: Expected earnings growth of 4.1%, beta of 0.64, and a dividend yield of 2.72% [13][14] - **Consolidated Water Co. Ltd. (CWCO)**: Expected earnings growth of 0.9%, beta of 0.51, and a dividend yield of 1.61% [15][16] - **Entergy Corporation (ETR)**: Expected earnings growth of 6.9%, beta of 0.63, and a dividend yield of 2.49% [17][18] - **Duke Energy Corporation (DUK)**: Expected earnings growth of 7.3%, beta of 0.45, and a dividend yield of 3.44% [18][19]

Core Insights - Consolidated Water Co. Ltd. has secured an $11.7 million contract to construct a wastewater recycling plant in the San Francisco Bay Area, which will have a capacity of 200,000 gallons per day and 600,000 gallons of treated water storage [1][2] Company Overview - Consolidated Water Co. Ltd. specializes in developing and operating advanced water supply and treatment plants, including seawater desalination facilities in various regions [6][7] - The company is currently engaged in a $204 million design-build-operate project for a seawater desalination plant in Hawaii [6] Project Details - The contract was awarded to PERC Water Corporation, a subsidiary of Consolidated Water, which focuses on water infrastructure in the Southwestern U.S. [2] - The plant will utilize membrane bioreactor technology to treat untreated wastewater, producing high-quality recycled water suitable for irrigation [2][3] - Key design features include the use of precast concrete basins and prefabricated equipment, which are expected to lower construction costs and expedite the project timeline [2] Environmental Impact - The wastewater recycling plant is projected to save 36 to 38 million gallons of potable water annually, thereby reducing dependence on local freshwater resources [3] Management Commentary - The CEO of Consolidated Water, Rick McTaggart, noted that this contract is part of a larger strategy, with three design and/or build projects totaling over $20 million expected in 2025 [4] - The company attributes its success in securing the contract to competitive pricing, extensive permitting experience, and a fast-tracked construction schedule [4]