Veolia Environment (NYSE: VE)

Many people have mentioned that the next commodity boom will be for water not oil. There are a limited number of ways to play the "water rush." PowerShares has a Water Resources ETF (PHO) , but not all of the companies in the fund own water resources. The best way to play the growing demand for fresh water is through Veolia Environment (VE). Veolia is a European water utility. When comparing Veolia with Aqua America using P/E ratio analysis, Veolia is undervalued.

Aqua America (WTR) 2007 P/E = 29
Veolia 2007E EPS ($3.80) * 29 = $110 (62% Upside)

The 2007 multiple used for Veolia could be more conservative and there is still a healthy amount of room for price appreciation.

Note: As of 11/26/06 I have no position in Veolia Environment