Reading time: approx. 8 minutes

Market capitalization: approx. € 788 million

Current share price: € 15.64 (as at October 24, 2025)

$ERII (+1,33%) (Energy Recovery Inc.) is one of those engineering stocks that has long operated away from stock market attention and is suddenly at the center of a megatrend. The Californian specialist develops systems that minimize energy losses in fluid-based processes - a technical niche topic that is becoming massively more important in the wake of decarbonization, energy efficiency and water scarcity.

The principle is simple but highly efficient: energy is lost as pressure in industrial processes. Energy Recovery uses this pressure to recover it via closed systems - whether in desalination plants, CO₂-based cooling circuits or heat pumps. The company thus represents the quiet, engineering-driven side of the energy transition.

The share is valued according to the 10B model, which combines technological quality, market potential, management performance, financial strength and risk asymmetry to identify small but potentially multipliable growth stocks.

1. business model - 17 / 20

The foundation of the business model is the proprietary Pressure Exchanger, a technology that transfers kinetic energy between high and low pressure streams. The system has long been the industry standard in seawater desalination - energy requirements can be reduced by up to 60 %.

Energy Recovery generates the majority of its revenue from hardware sales and service contracts, but is gradually expanding the technology to new industries. These include CO₂ refrigeration systems, industrial heat recovery and process gases. This modularity makes the business model more scalable and less cyclical.

With gross margins of over 70% and stable cash flows, ERII is one of the most profitable providers in the energy efficiency sector.

2. market & growth potential - 16 / 20

Energy recovery addresses several global growth trends in parallel. Water scarcity and urbanization are driving the expansion of desalination plants - a market with an annual volume of over USD 10 billion. At the same time, the decarbonization of industry is accelerating the transition to efficient, CO₂-based heat pump and cooling systems.

The total addressable volume of the segments in which ERII is active is between 15 and 20 billion US dollars annually, while current sales are around 125 million US dollars. This shows how much scaling potential there is in the business model.

Growth will remain project-driven in the short term, but structurally robust in the long term - driven by political and economic efficiency targets worldwide.

3rd Technological Position & Moat - 18 / 20

Energy Recovery has a clearly defined technological moat. Over 500 patents protect key components and the PX technology is regarded as the global benchmark in desalination.

The real capital lies in the engineering expertise: the understanding of complex pressure and fluid mechanics is deeply rooted and almost impossible to copy. This specialization gives ERII an edge that goes beyond pure hardware - a platform that physically addresses energy losses, not just measures them on the software side.

Relevant listed benchmarks are:

• $XYL (-0,02%) (Xylem Inc.) - US specialist in water technologies, similarly high-margin but much broader-based.
• $VIE (-0,57%) (Veolia Environnement) - French infrastructure group with a focus on desalination and recycling, but with less technological specialization.
• $DHR (+0,05%) (Danaher Corp.) - global technology group with a focus on environmental and process analytics, more systemic than focused.

This peer group shows that Energy Recovery occupies a technological niche where physical efficiency is the true competitive advantage.

4. management & capital allocation - 14 / 20

David Moon has led the company since January 2025. He took over from Robert Mao, who had prepared the strategic expansion into new applications in 2023/24. Moon, previously Chief Operating Officer, brings operational experience and a clear focus on scaling.

The balance sheet is debt-free and the cash position is over 100 million US dollars. Research and development are financed entirely from cash flow - an indicator of solid capital discipline. Moon pursues a pragmatic approach: less theory, more implementation. The next strategic step is to accelerate the market penetration of the new CO₂ technologies.

This combination of technical depth and financial prudence creates an attractive foundation for sustainable growth.

5. opportunity-risk profile - 15 / 20

With an expected P/E ratio of around 34 (2025e), the share appears ambitiously valued at first glance, but the combination of a high margin, stable balance sheet and structural tailwind speaks for itself.

The risk lies in the speed of scaling. If the transition from desalination to new segments is slower than planned, there is a risk of phases of operational stagnation. In the medium term, however, the opportunity for Energy Recovery to address several vertical markets with the same technology and thus multiply its sales leverage outweighs this risk.

Overall score and classification

After evaluation in the 10B model, Energy Recovery achieved 17 points for business model, 16 for market and growth, 18 for technological position, 14 for management and 15 for opportunity-risk - an overall score of 80 points. It combines technological precision, high margins and conservative balance sheet management in a market with structural tailwinds.

I plan to build up an initial position in the near future. A small technology stock with real leverage on efficiency, water and decarbonization - exemplary for the 10B universe.

Reading time: 7 minutes

This stock presentation is based on my Hidden Quality Radar (HQR) - a scoring model that identifies companies with strong substance and growth potential that are still flying under the radar despite their high quality. Consolidated Water is one such case. A niche provider of water desalination whose balance sheet quality, project expertise and geographical focus are coming to the fore in an increasingly underserved market environment.

Here is the rating from the model (85/ 100 points):

- Growth & Profitability (17/20): The company shows solid double-digit growth in revenue and earnings (e.g. 3% YoY revenue growth in Q2 2025, 39% EPS surprise), high operating efficiency with ~38% gross margin and stable EBIT margins above 20%.

- Balance sheet & liquidity (16/20): The financial structure is very strong, with an equity ratio above 80%, net cash position and consistently positive free cash flow generation. Debt is minimal.

- Market Position & Moat (11/15): Consolidated Water has a technological edge in water desalination, is the niche leader in the Caribbean and is increasingly establishing itself in the US. The technological and geographical focus ensures a certain moat.

- Valuation & Momentum (11/15): With a P/E ratio of around 35 (2025) and forward P/E ratio of around 24 (2026), the share is trading slightly below the historical average and is therefore moderately valued. The share price momentum is positive, with the share price rising after better Q2 figures.

- Visibility & Radar (30/30): The company has very low analyst coverage and institutional ownership. The under-the-radar character is therefore very pronounced, which offers opportunities for investors looking for small caps and growth stocks that receive little attention.

While other companies focus on short-term technology cycles $CWCO (+0,33%) operates in a long-term, real economic growth area: clean drinking water in water-scarce regions. The combination of decades of experience, a debt-free balance sheet and an upcoming major project in Hawaii makes the share - despite its ambitious valuation - a structurally interesting quality stock.

A solid growth stock with water as a strategic lever

Consolidated Water operates desalination and water treatment plants in the Caribbean (including the Cayman Islands and the Bahamas), in Mexico and in the south of the USA (Florida). Revenue sources include water sales to end customers, operating contracts for government plants and technical services.

An early project that attracted a lot of media attention was the Rosarito Desalination Project in Mexico (Baja California), which was originally planned as a joint venture between CWCO and Suez. The aim was to supply Baja California and Southern California with desalinated water. However, the project has since been effectively put on hold. There has been no active construction activity since 2020-2021. This is due to regulatory uncertainties, political changes and a lack of funding. CWCO still holds the project company NSC Agua, but according to the current SEC filings (Q2 2025) there are no short-term construction plans.

Nevertheless, the project remains strategically interesting - should the political situation in California change and the need for alternative water sources return to the agenda, it could be reactivated.

Active growth driver: the Kalaeloa project in Hawaii

The new major project in Hawaii is much more concrete: Kalaeloa, a 204-million-dollar seawater desalination plant on the island of Oʻahu. Construction is scheduled to start in 2026, with commissioning planned for 2027. Long-term operation will be governed by a 20-year contract with the Honolulu State Board of Water Supply - with guaranteed service revenues.

Analysts are forecasting a significant increase in earnings from the start of construction:

• 2025 revenue (estimated): 134 million $
• Turnover 2026 (estimated): 211 million $ (+57 %)
• Profit growth 2025 → 2026: +47 %
• EPS increase: 1.11 $ → 1.63 $
• Ø growth until 2027: 36.6% sales / 32.1% profit p. a.

Sources: SimplyWallSt, Investing.com, Finanzen.net (as at October 2025)

Strong balance sheet, stable margin, predictable cash flows

In addition to the project pipeline focus, it is the operational basis that makes Consolidated Water so robust. The company operates with an EBIT margin of over 20%, is net debt-free, generates stable free cash flow and has an equity ratio of >80%.

The existing water contracts - e.g. in the Cayman Islands - run for years, are inflation-indexed and often government-backed. This structure enables the company to take on new projects without dilution or external financing. At the same time, the model can be scaled gradually - through new markets, not necessarily through larger volumes.

Valuation: ambitious, but underpinned by growth potential

The share of $CWCO (+0,33%) shares are currently valued at a P/E ratio of around 35 - based on expected earnings for 2025 (EPS: USD 1.11). This is not a bargain, but already reflects part of the expected growth.

However, the full potential of the Kalaeloa project from 2026/27 is probably not yet fully priced in. Based on the 2026 EPS estimate of USD 1.63, the forward P/E ratio is reduced to around 24. In relation to the expected earnings growth of over 30% p.a., this results in a moderate PEG ratio - an indication that the share is not overpriced despite its ambitious valuation, but still has room for upside if the pipeline is successfully implemented.

Risks: project risks, regulation, visibility

Despite the operational quality, there are risk factors:

• Project-relatedness: the company is heavily dependent on a few, large projects. Delays or disruptions at Kalaeloa could have a direct impact on growth and valuation.
• Regulation: Desalination plants are politically sensitive, particularly in the USA. Opposition from environmental groups or delays by authorities are always an issue.
• Low visibility: The share is hardly liquid, ETFs are not involved, analysts are hardly active - this makes a quick revaluation or larger allocations difficult.

However, CWCO's conservative structure, clear financing, project transparency and low operational complexity noticeably mitigate these risks.

Peer group: smaller, but superior in terms of balance sheet

In comparison with the large utilities such as $AWK (-0,31%) (American Water Works), $WTRG (-0,08%) (Essential Utilities) or its European counterpart $VIE (-0,57%) (Veolia), Consolidated Water stands out due to the strength of its balance sheet. While many large caps are highly indebted and hardly grow organically, CWCO combines solid operating performance with a financially flexible starting position.

Compared to specialized engineering companies such as $XYL (-0,02%) (Xylem) or $TTEK (-0,69%) (Tetra Tech), CWCO has significantly higher margins and is less cyclical. Scaling is achieved through regional expansion - not through aggressive cost programs or risky margin levers.

Quality that delivers, not shines

Consolidated Water is a prime example of the HQR model: structurally strong, financially sound, strategically well positioned - but operationally underestimated. With the Kalaeloa project (Hawaii), a real growth catalyst is in the starting blocks. The impact on sales and profits is substantial and already easy to plan.

I am therefore building up an initial position - not as a momentum trade, but as a long-term investment in a genuine quality stock with a clear operational perspective. If water is the new oil, then CWCO may not be the drill - but the infrastructure pipeline through which it flows.

Sources:

- Company website: https://www.cwco.com

- Share price data: 10/20/2025

- Analyst estimates: Simplywall.st, Investing.com, Finanzen.net

- SEC filings Q2 2025: https://www.sec.gov/edgar/browse/?CIK=928340

$XYL (-0,02%)

Xylem Inc. reported strong second quarter results on July 31, 2025. Here are the key points:

Financials

Revenue: $2.3 billion - an increase of 6% year-over-year

Earnings per share (EPS): $0.93 (reported value), $1.26 (adjusted) - both an increase of

Adjusted EBITDA margin:

Record 21.8%, an increase of 100 basis points

Net income: $226 million; adjusted: $307 million

Outlook for the full year 2025

Revenue guidance: $8.9 to $9.0 billion (previously: $8.7 to $8.9 billion)

Adjusted EPS forecast: $4.70 to $4.85 (previously: $4.50 to $4.70)

Free cash flow margin:

Expected at 9-10%

Water technology company Xylem on Thursday raised its second-quarter sales and earnings forecasts, citing robust demand and strong operating performance that helped the company beat Wall Street estimates for the second quarter.

The company's shares rose 8.4 percent in morning trading.

The company said productivity savings and strong price realization led to margin expansion that outpaced the impact of inflation.

"Our simplification efforts have already yielded measurable gains in speed, accountability and customer responsiveness," CEO Matthew Pine said in a statement.

Xylem now expects adjusted earnings per share in 2025 to be between $4.70 and $4.85, compared with its previous guidance of between $4.50 and $4.70.

The company is forecasting revenue of USD 8.90 to 9 billion in 2025, up from previous expectations of USD 8.70 to 8.80 billion.

On average, analysts had expected earnings of USD 4.64 per share and revenue of USD 8.76 billion, according to data compiled by LSEG.

Sales from Xylem's water infrastructure division, which sells products such as water and wastewater pumps, totaled $650 million in the quarter, exceeding analysts' expectations of $640.27 million.

The applied water technology unit, which sells pumps, valves and other equipment, reported sales of $483 million, above analysts' expectations of $462.27 million.

On an adjusted basis, Xylem earned $1.26 per share in the quarter, compared with analysts' average expectations of $1.16 per share.

The company reported quarterly revenue of $2.30 billion, compared to analysts' estimates of $2.21 billion.

Because I'm bored at the moment and I'm also interested in your opinion, I'll throw a few titles in here that I think are all very exciting and usually fly under the radar.

Here we go 👇

$CORT (+0,02%) Corcept Therapeutics

$HALO (-0,96%) Halozyme Therapeutics

$KRI (-0,18%) Kri Kri Milk Industry

$ALCRB (+1,85%) Carbios

$APH (-1,74%) Amphenol

$XYL (-0,02%) Xylem

$MPWR (+1,65%) Monolithic Power Systems

$VITL (+0,61%) Vital Farms

These are, of course, shares from a wide variety of sectors and with different "degrees of maturity", but as I have written, I think they are all very exciting.

Do you know them all? Opinions?

P.S. I myself have Corcept, Carbios and Amphenol in my portfolio, and I follow the others more or less regularly.

$MDT (-1,26%)

After 4 long years of stagnation and share price decline, I have decided to sell Medtronic and further expand my portfolio in line with my preferences.

To this end, I have reduced my positions

In Shell $SHEL (+0,31%) , Carrier Global $CARR (+0,95%) , Total Energies $TTE (-0,14%) and Nike $NKE (-0,63%) expanded.

With Nike I have now also reached my desired size 😁

There is currently only one single share in the standing order and that is Carrier Global.the standing order on the Vanguard FTSE all-world remains unchanged.

I still intend to $SHEL (+0,31%) , $TTE (-0,14%) , $XYL (-0,02%) , $ECL (+0,38%) and $LIN (-0,16%) to expand.

I am always open to comments and suggestions for improvement 😁

In Part 1 I described my start as an investor from 2010 to 2016. Despite loss-making investments and bad decisions (buying AT&T instead of Amazon), I was able to achieve a portfolio value of €35,000. These experiences were to lay the first foundation stone for my future successful investment strategy (https://app.getquin.com/de/activity/PElWrODsmV)

In part 2 I talk about further setbacks in 2017 and 2018 and how the purchase of MasterCard shares marked the turning point in my investment career. Despite initial losses and professional dissatisfaction, I realized that my original strategy wasn't working and discovered the "dividend growth" for me. With a new professional position and a solid salary, I was finally able to really hit the ground running in 2019 (https://app.getquin.com/de/activity/LUkWiLtZKX)

In part 3 it will now be about the years 2019 to 2021 will be discussed. In these 3 years, my portfolio has increased fivefold. From €40,000, it went up to €199,000 in the meantime. But not everything was positive here either. During this time, I also made the two worst trades of my investment career. In addition to Wirecard, there were two other equity investments that resulted in losses of over 80%.

The year 2019 & the first share savings plans:

The year 2019 started with a portfolio balance of ~€40,000 and after my MasterCard purchase in December 2018, my major portfolio reorganization was to continue directly at the beginning of 2019. So in the first four months with Tencent $700 (+0,6%)
Intel $INTC (-6,63%)
Salesforce $CRM (-0,09%)
Alphabet $GOOG (+2,4%) and Meta $META (+0,3%) (then still Facebook), five more tech stocks were added to my portfolio. In return I have BHP Billiton $BHP (-0,3%)
Macy's $M (+0,76%)
and Hugo Boss $BOSS (+0,05%) sold.

Later in the year, the shares of Mercedes $MBG (+0,67%)
and AT&T $T (+1,81%) were also removed from the portfolio.

In addition to further acquisitions such as Pepsi $PEP (+0,17%)
Nextera Energy $NEE (+1,01%)
or Xylem $XYL (-0,02%) I also recognized the benefits of share savings plans in 2019 and started to set up a pure "savings plan custody account". At that time, this was still done via comdirect or Consorsbank and each savings plan execution cost a fee of 0.75%.

Another sale in 2019 was the Gamestop-share $GME (-1,38%) . Bought in 2016 to have something to do with gaming in the portfolio, but not taking into account that stationary sales are becoming less and less relevant. In the end, the share price fell by 85% - unfortunately, this was long before the memestock hype emerged.

My portfolio rose to ~€67,000 in 2019 and achieved a return of 23%. However, this was still well below the MSCI World and the S&P 500.

The year 2020 - Corona, Wirecard bankruptcy & 100k before 30 in the portfolio

2020 - a year that few of us will probably forget. While everything was still going reasonably smoothly in January and February 2020, chaos was set to break out from mid-February/March.

The first few weeks of 2020 had given rise to hopes of a very positive development in my portfolio. From the beginning of January to mid-February, my portfolio rose by almost €10,000 to €77,000.

Panic then slowly set in from mid-February. I still remember exactly how trading on the US stock markets was repeatedly suspended for short periods and daily losses of 10% were normal. At 0 o'clock sharp, I looked at the US futures and in seconds the futures went down by -5%. A cap for the futures, the futures loss must not be higher and you knew the next morning it would end badly for the DAX.

But when there is blood in the streets, you can make very good deals! So in March 2020 I bought the Allianz
$ALV (+0,34%) for €118. This gives me a personal dividend yield of almost 12% based on the current dividend of €13.80. Unfortunately, I only bought for €1,000 in total.

Also Starbucks
$SBUX (+0,95%) I was able to buy for less than €50.

The stock market crash continued until the Fed made short work of it and ended the crash single-handedly. The crash was ended with interest rate cuts and massive money printing and once again the saying "Never bet against the FED" proved to be true.

The stock markets then went through the roof and within a very short space of time were already back to a positive level compared to the end of 2019. Every share that somehow falls under the term "stay at home" was suddenly the hot tip on the stock market. Whether the Peloton $PTON (+1,58%)

or Teladoc $TDOC (+6,68%) everything went through the roof.

I let myself get carried away and did about 10 "Stay at Home" hype stocks into a growth savings plan portfolio. Of these, at the end of 2024 with Sea $SE (-0,19%) and MercadoLibre $MELI (+0,14%) only two shares remained. It goes without saying that most of them left the portfolio at a loss.

But 2020 was also the Wirecard year $WDI BaFin's ban on short selling, a year-long audit by EY, political backing and massive investments by German fund managers from DWS, UnionInvest and Deka vs. a journalist from the Financial Times.

Wirecard's claims that the journalist was in cahoots with short sellers and the backing from various institutions were unfortunately too credible for me.

When Wirecard faced the press and announced that EUR 2 billion could no longer be found, things went downhill and it became clear to everyone that the company was heading for insolvency. Before trading was suspended, I was able to sell my shares at a 50% loss and got off lightly.

Later in the year, I was able to conclude an extremely favorable leasing offer and sell my private car. The proceeds went straight into my securities account and I broke the €100,000 barrier in November 2020.

My portfolio then ended the year with a value of ~€120,000. At +5%, my performance was pretty much in line with the MSCI World.

The year 2021 - HYPE! Wall Street bets, crypto and almost 200k in the portfolio

The year 2021 was characterized above all by hypes. Cryptocurrencies, memestocks and memecoins were in the headlines everywhere. Gamestop, Dogecoin, SPACs and NFTs everyone had to have.

Traditional shares became almost boring.

One of the reasons was certainly the checks that the US government issued to its citizens. It was still Corona, many were locked down and suddenly people started gambling on the stock market.

The hype can be illustrated very well using the example of NFTs. In 2021, NFTs worth $17 billion were traded, in 2023 it was only 80 million - a decline of 97%. According to one study, ~95% of all NFTs are now completely worthless.

The madness in one example: Procter & Gamble launched a Charmin toilet paper NFT. This was sold for over $4,000. All proceeds were donated, but a symbol of the madness of 2021.

From a portfolio perspective, 2021 was great! In the end, there was a +32% return and a portfolio value of over €190,000, which at times in November 2021 was €199,000.

My top performers were NVIDIA
$NVDA (+1,45%) with over 100% price gains and Pfizer $PFE (+0,14%)
, which was driven by the vaccine hype and at €50 was twice as high as in 2024.

My worst performer was another 80% loss with TAL Education $TAL (-0,46%) . An education company from China. Unfortunately, this was the first time I was able to experience the political arbitrariness in countries like China. Overnight, it was decided that education/tutoring could only be run as a non-profit. Of course, this was almost a death sentence for the company and the share price plummeted by 80%.

Asset development & return:

After the years 2013 to 2018 were forgettable in terms of returns, the years 2019 to 2021 finally delivered:

Year
Deposit value
Yield

2019 67.000€ +19%

2020 121.000€ +5%

2021 193.000€ +34%

Vermögensentwicklung 2019-2021:

Vermögensentwicklung 2013-2021:

Outlook:

Looking back on the hype year 2021, it is almost obvious that 2022 had to be clearly negative.

After the party, however, came the hangover in the form of inflation and the war in Ukraine. Sharply rising interest rates and global economic concerns did the rest.

In the next part, I would therefore like to look at the years 2022 & 2023. I will then combine 2024 with my review of the year in the last part.

#strategy

#personalstrategy

#etfs

#dividends

Out with the critters and into the $HMWO (+0,63%)

All securities have been sold:

• Blackrock $BLK (+0,21%) (729€)
• Palantir $PLTR (+2,37%) (24€)
• Xylem $XYL (-0,02%) (121€)
• Automatic Data Processing $ADP (+0,04%) (219€)
• Visa $V (+0,29%) (249€)
• Nvidia $NVDA (+1,45%) (118€)
• Parker Hannifin $PH (+0,71%) (476€)
• Broadcom $AVGO (+2,03%) (162€)
• Ferrari $RACE (+1,42%) (394€)
• Allianz $ALV (+0,34%) (262€)
• Mutares $MUX (+1,59%) (35€)

Reason: Due to time constraints away from individual stocks and towards ETFs

Easier said than done: You have put time and effort into the analysis and have gone through ups and downs with them.

It's hard for me, but well, it doesn't help

My foray into water shares has so far been a good idea that I will continue to pursue

Severn Trent $SVT (+1,23%) has increased its dividend to shareholders after profits rose by a fifth last year, despite the company's wastewater pollution rising by a third in 2023.

The FTSE-listed company, which supplies water to much of Wales and the West of England, increased its final dividend by 9% to 70.1p a share, while profits rose to £201.3m.

I've got my water goods basket

out $AWK (-0,31%)
$XYL (-0,02%) and just $SVT (+1,23%) started to build it up. I'll keep at it

https://uk.finance.yahoo.com/news/severn-trent-hikes-dividend-despite-081605635.html

Small addendum

The industry regulator Ofwat will meet soon to decide on the increase in draft legislation between 2025 and 2030. The draft proposals are due to be announced on June 12.

Severn Trent wants to invest 12.9 billion pounds and increase customer bills by 35.7 percent.

Between 2020 and 2025 the average annual bill for Severn Trent was £402.63, for the next five years the average would be £546.35 if Ofwat's business plan is accepted.

https://www.bbc.co.uk/news/articles/c0dem8v7epzo

Hello Community,

thank you for your great response to my last post Sin Stocks - Stocks that are considered sin sin. Today I would like to share another controversial article with you:

How do I profit from climate change?

Climate change is being talked about like a pig in practically all the traditional media, especially in Germany. I'm less interested in hyping up the next apocalypse than in taking a rational view: what megatrends are emerging and how can I invest in these trends?

To keep things interesting for you, I won't be writing the usual blah blah blah about renewable energies, electric cars, hydrogen and so on. You're probably already familiar with that. I'm also interested in stocks that might only be interesting at second glance and shouldn't be found in every 08/15 portfolio.

Before we get started, one more request: let's stay on topic and talk about shares. In my opinion, moral or political discussions have no added value if no investment can be derived from them.

Impact 1: Increase in natural disasters and extreme weather

The hurricanes in the USA, the flood disaster in Arthal... each of you will be aware of one event. There is no doubt that natural disasters can cause enormous damage. The task of the next few decades will probably be to make buildings more resilient, to make cities more resilient and so on. However, the buildings that are already standing do not (yet) meet these requirements. Therefore, the first share is:

$CAT (+0,84%) Caterpillar.

With their construction machinery and clearing vehicles, they can clear up what has been destroyed. Our colleague @TheOrangeExcavator recently wrote a nice introduction to this share here on the platform.

Then, of course, there is insurance, as the need to insure against such events will increase. The insurance business model is based on calculating risks and then setting a price. If the risks increase, the price rises - and so does the need for insurance.

$MUV2 (+0,48%) Munich Re has been able to increase its profits by over 20% p.a. in the last 5 years. In addition, there is a dividend yield of around 3.3%, which is constantly being increased. The share is currently performing well - in my view, something for the watchlist.

Much more exciting from my point of view are "shovel manufacturers" for insurance companies. I am talking, for example, about $VRSK (+0,61%) Verisk Analytics, a specialist in data analysis for insurance companies (and increasingly other sectors). They either create analyses for their customers or offer their analysis tools for independent analyses.

Why take the risk of a single insurance company when you can rely on the supplier in the background? Cash flow and profit have been growing at double-digit rates p.a. for 5 years. Sales growth is estimated at 7.5 %. All this with high sales stability. A very interesting growth stock in my view, which could be picked up in the next correction.

Impact 2: Rise in sea level

Sea levels are expected to rise by up to 1.1 meters by 2100. Mega construction projects are needed to protect against this. Here I have (how could it be otherwise) a Dutch company on my radar: $ARCAD (+2,04%) Arcadis. The company offers planning and technical development services for construction and infrastructure projects. This is not a pure play on sea level rise - they do many projects, such as environmental remediation, mobility projects and management consulting.

Sales growth >8 % in the last 5 years, profit growth of approx. 15 % p.a. in the last 5 years speak for themselves.

It has also just performed quite well, certainly something for the watchlist. If interest rates fall again and the scope for investment increases again, this share will certainly also benefit.

Impact 3: Water shortage and drought

Sea levels are rising - and water is becoming scarce? No contradiction! We are talking about fresh water/drinking water.

In my view, the most interesting value here is $XYL (-0,02%) Xylem. They offer a wide range of water-related technologies: Transportation, testing, wastewater treatment, purification and, and, and.

Sales growth >10% in the last 5 years, estimated earnings growth of 11%. It has also just performed well, with a P/E ratio of 25 I would consider buying in. The share always comes back well.

A look at water utilities could also be worthwhile, for example $AWK (-0,31%) American Water Works. I presented the share in a post-buy article of mine - if you are interested, you can find more about the company there.

If you want a more exotic stock, you can take a look at the $TORO Toro Company. The company offers irrigation systems for agriculture, golf courses and sports fields, among other things. The less water there is, the more efficiently it has to be distributed. They are also active in "snow and ice management". Could also become more relevant in winter with increasing extreme weather events. Sales growth of over 8% p.a. in the last 5 years, profit growth of 6%. Plus a dividend of 1.6%. Currently quoted below the historical P/E ratio.

Impact 4: Changing biodiversity

How can seeds be adapted to the changing climate as a source of food for humanity? Monsanto used to be a company in this field - now part of Bayer. From my point of view, it's a collection of powder kegs that regularly blow up.

But there is also a pure play alternative: $CTVA (+0,37%) Corteva.

They produce seeds, pesticides, fungicides, etc. The key figures are somewhat mixed, but in my view it is an exciting candidate for the watch list. The business could gain more and more momentum due to climate change.

It is also becoming increasingly important to get as much as possible out of existing crops. Here I myself have $DE (+0,35%) Deere in my portfolio.

Sales growth over 5 years: 9.3 % p.a., profit growth 30.7 % p.a. in the last 5 years. P/E ratio of 12 (!).

Top dog in its field. Some also see the share as an AI investment, as they are producing increasingly intelligent machines for agriculture. Smaller farmers will probably increasingly reach their limits, it will consolidate, as only "the big players" can secure the top technologies.

Due to a certain cyclicality, I have the share (currently the only one) in my savings plan.

Impact 5: Social unrest and migration

It cannot be ruled out that new causes of war over fertile soil, drinking water etc. will emerge in the future. The big players such as $LMT (-1,11%) Lockheed or $BA. (-1,44%) BAE should be familiar to most people. Less well known is probably the $KOG (+0,73%) Kongsberg Group from Norway. Its main segments are Defense Aerospace and Maritime. Double-digit sales growth, even stronger profit growth.

Unfortunately, this can also be seen in the chart. Probably too expensive due to the current crises - but in my view the share should be kept on the radar alongside the well-known stocks.

That was my presentation of some investment cases. Even if some of them seem expensive at the moment, I think it makes sense to create a watchlist of interesting candidates at an early stage. When things go wrong, you know what's on your shopping list. Then you can get into companies that should have a tailwind in the long term.

Now it's up to you:

- What (perhaps indirect) effects do you see from climate change?

- Which shares do you think could benefit from climate change?

- Which shares do you already have in your portfolio?

I look forward to your comments.

Fun fact: When I asked my girlfriend (not really interested in shares) about possible profiteers, her timid answer was: "Umbrella manufacturers?" But I hadn't found a pure player, so there was nothing in the article 😉

You never stop learning.

Your Money Man