And there’s plenty of work for the likes of Nalco Holding Co. (NYSE: NLC),Clean Harbors, Inc. (NYSE: CLH), and Newpark Resources, Inc. (NYSE: NR). A ruptured crude oil pipeline belonging to Exxon Mobil Corp. (NYSE: XOM) dumped an estimated 1,000 barrels of oil into the Yellowstone River about 10 miles upstream of Billings, Montana. In China’s Bohai Bay, a well operated by ConocoPhillips Corp. (NYSE: COP) and China’s Cnooc Ltd. (NYSE: CEO) has leaked about 1,500 barrels of oil, and a well in the North Sea operated by Royal Dutch Shell plc (NYSE: RDS-A) has leaked about 1,300 barrels into the waters off the coast of Scotland.

The leaks — and there are plenty of others — have led to a slowdown in offshore drilling and, in the US, more opposition to a plan by Transcanada Corp. (NYSE: TRP) to build the 1,700-mile Keystone XL pipeline to carry crude from the oil sands region of western Alberta to the Gulf Coast. And the new regulatory regime is not just taking hold in the US either.

The five countries surrounding the Caspian Sea and its 30 billion barrels of oil have negotiated an agreement to establish an emergency response mechanism for potential oil spills. Greenland has just published its spill response plan even though test wells off the country’s west coast have so far shown no commercial quantities of oil or gas.

The plan with the largest effect appears to come from the United Nations Environment Programme, related to pollution of drinking water in Nigeria’s Ogoniland. The UN conducted a 14-month study of the effects of 50 years of oil drilling and transportation in the region and concluded that the situation is much worse than originally believed. The clean-up effort is expected to surpass that which followed the Gulf of Mexico spill last year with officials estimating recovery could take 25-30 years.

Tighter regulations and the development by governments of detailed emergency response plans means that companies like Nalco and Clean Harbors have an opportunity to shop their expertise more widely around the world. The work would not be just clean-up, but could also involve specialized consulting.

When Clean Harbors announced its second quarter results earlier this month, the company also indicated it is shopping around for acquisitions. Nalco has also reported second quarter earnings and raised its guidance for both EPS and revenues for the full fiscal year. Nalco has also agreed to a merger with Ecolab Inc. (NYSE: ECL) that is expected to close in the fourth quarter.

Clean Harbors posted an all-time high earlier this month and the stock closed yesterday at $51.57, in a 52-week range of $29.35-$59.35. Clean Harbor shares are up nearly 70% in the past 12 months. Nalco’s shares jumped in mid-July on the merger agreement with Ecolab. Shares closed yesterday at $33.48, in a 52-week range of $21.98-$37.34.

Paul Ausick

The new index barometers will join the NASDAQ Water Index and the NASDAQ Water Total Return Index.  Whether this is green or sensible is up to you, but there is a fair question to ask here: How many water indexes are needed?  The new indexes are as follows:  OMX Global Water Index, NASDAQ OMX Global Water Total Return Index, NASDAQ OMX US Water Index, and the NASDAQ OMX US Water Total Return Index.

What is interesting about this and only highlights our key question even more is that NASDAQ is selecting the constituents from the same universe of stock picks as the first two water index readings.  The difference is in the component weightings. The total return indexes reinvest dividend payments and the price returns effectively discount the dividends.

Potable water and its future availability remain the key topics of why your investment portfolio should chase this sector.  Again, the trick is that it is not easy.  It turns out that many “water companies” turned out to be dependent upon the creation of new housing subdivisions over the last fifteen years or that they are tied heavily to government contracts.  General Electric Co. (NYSE: GE) and 3M Co. (NYSE: MMM) are two key holders of water investing, but these water operations are mixed with fluids in these conglomerates and investing in any conglomerate because of one aspect of their business just misses the point of investing.

Along with the theme of water investing for the long-term, we did create a list of Stocks to Own for the Next Decade and that included American Water Works Company, Inc. (NYSE: AWK).

What makes water difficult to invest in is that fluid and hydraulic outfits keep looking to consolidate via mergers and acquisitions.  This fresh Nalco Holding Company (NYSE: NLC) merger with Ecolab Inc. (NYSE: ECL) has the goal of adding $5.4 billion in a combination of cleaning, sanitizing and water management.

We now have ITT Corporation (NYSE: ITT) breaking itself up and one of the 3 surviving companies, its water company, will be called Xylem under the “XYL” ticker on the New York Exchange.

We recently featured some of our top water investments out to 2012 and beyond, including American Water Works Company, Inc. (NYSE: AWK), Insituform Technologies Inc. (NASDAQ: INSU), Tetra Tech Inc. (NASDAQ: TTEK), and others.  This was an expanded and updated module for our Top Water Pick for 2011.

What we do expect as one possible outcome from more index launches is the creation of more exchange-traded funds which track water investing.  There are already ETF products around the Palisades Water Index and Standard & Poor’s indexes.  ETFs do not currently track the NASDAQ indexes in water per our most recent screens.

PowerShares Water Resources Portfolio (NYSE: PHO) has more than five years of history and it has well almost $1.2 billion in assets inside the ETF.  Its international equivalent that includes the U.S. but is more globally focused is the PowerShares Global Water Portfolio (NYSE: PIO) but that one is only about one-third of the size in assets and only about one-fourth as liquid when measuring shares per day.

And then come the less liquid water ETFs, no pun intended… There is also the Guggenheim S&P Global Water Index (NYSE: CGW) ETF, which carries about $250 million in assets and trades about 50,000 shares a day.  The even smaller First Trust ISE Water Index Fund (NYSE: FIW) has about $69 million in assets but trades an average of under 20,000 shares per day.

There are many more ways to invest in water, but you have probably gathered that we maintain it is not an easy sector to invest in.  Many pure-play water companies trade at significant premiums to the broader market.  Even when you go through the individual stock holdings that these water ETFs hold, you will suddenly realize that the term “Water Investing” really translates to “companies which also have water operations.”

JON C. OGG

Apple Inc. (NASDAQ: AAPL) completely blew its targets away last night, even better than the best bulls expected; After-hours we saw a 5.9% gain of $22+ at $398.10 and pre-market trading with just over an hour is still up about 5.35% at $397.02.

Brocade Communications Systems, Inc. (NASDAQ: BRCD) is lower on fears that its longstanding hopes of being acquired by Dell could be fading.  Dell announced the acquisition of private Force 10 Networks to get into networking and that usurps the need for Brocade.  At least that is the theory.  Shares are down 3.5% at $6.07 in the pre-market.

Chipotle Mexican Grill, Inc. (NYSE: CMG) is taking a breather after having risen and risen after reporting soft earnings. Shares were down 4.7% at $318.00 last night but an analyst upgrade this morning has shares down only about 3% at $323.50 this morning.

Cintas Corporation (NASDAQ: CTAS) managed to beat earnings and its also gave guidance that meets or beats estimates.  Shares were up more than 7% at $33.08 in the after-hours and now we have shares up 10% at $34.00 in the pre-market.

Citi Trends, Inc. (NASDAQ: CTRN) lowered guidance and sees much wider losses than expected.  The trend is lower, with shares down about 19% at $12.90 this morning but volume is thin and this one trades about 155,000 shares a day is all.

CSX Corporation (NYSE: CSX) is up more than last night’s 1.6% gain as shares pre-market are up 2.6% at $26.15 after beating estimates and backing its prior earnings guidance.

E*TRADE Financial Corporation (NASDAQ: ETFC) is soaring after holder (and near-controller) Citadel is calling for a shareholder meeting to maximize shareholder value after dissatisfaction with results.  Shares are up 7.5% at $13.92 in pre-market trading after the filing.

Fortinet Inc. (NASDAQ: FTNT) sounded good on the surface after it grew revenues 35%, grew billings 22% and grew earnings 88%… Shares were getting smacked down 21% at $21.25 in the after-hours session, but the stock is now down “only” 17% at $22.16 in pre-market trading as traders may be bottom fishing.

Government Properties Income Trust (NYSE: GOV) filed to sell some 5 million shares of common stock in the REIT to cut debt under its revolving credit facility and for general business purposes.  Shares are down 3.4% at $25.47 in the pre-market session.

The combined entity is expected to have annual revenues of roughly $11 billion.  The deal also values Nalco at $38.80 per share, which is a 34% premium to yesterday’s closing price of Nalco.  Nalco’s shareholders get to choose a cash-out or a stay-in as Ecolab is giving shareholders the option to either receive 0.7005 shares of Ecolab common stock per Nalco share, or they can choose to receive $38.80 in cash.  The overall mix of consideration paid to Nalco shareholders will be approximately 30% cash and 70% stock.

Ecolab noted that it will issue about 68.9 million shares of Ecolab stock and that it will pay out about $1.6 billion in cash.  As part of the deal, there is also the assumption of about $2.7 billion in debt, making the enterprise value of the deal come to about $8.1 billion.

In the announcement, Nalco also announces record preliminary second quarter sales estimates and it raised guidance for 2011.  The transaction has been approved by both boards of directors.

As of the close, Nalco was valued at $4 billion with its $28.87 share price and the 52-week range was $21.98 to $32.62.  This buyout represents all-time highs.  Ecolab shares closed at $55.39 with a market cap of $12.85 billion and its 52-week trading range is $46.05 to $57.19.

JON C. OGG

Bed Bath & Beyond Inc. (NASDAQ: BBBY) Reiterated Buy and Raised target to $63 at Argus.
Broadcom Corporation (NASDAQ: BRCM) Reiterated Buy and $46 target at Argus.
Discovery Communications, Inc. (NASDAQ: DISCA) Cut to Neutral at UBS.
E-Commerce China Dangdang Inc. (NYSE: DANG) Started as Neutral at Susquehanna.
FedEx Corporation (NYSE: FDX) Raised to Buy at Argus; Reiterated Outperform and raised target to $123 at Schwab.
F5 Networks, Inc. (NASDAQ: FFIV) Cut to Neutral at JPMorgan.
First Solar Inc. (NASDAQ: FSLR) Started as Sell at Maxim.
Hubbell, Inc. (NYSE: HUB-B) Reiterated Outperform as Bull of the Day at Zacks.
Iconix Brand Group, Inc. (NASDAQ: ICON) Reiterated Strong Buy as Value at Zacks.
Nalco Holding Co. (NYSE: NLC) Cut to Sell at Goldman Sachs.
Raptor Pharmaceuticals Corporation (NASDAQ: RPTP) Reiterated Buy and $10 target at Canaccord Genuity.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Johnson & Johnson (NYSE: JNJ) had been raised previously but this was SAME AS LAST QUARTER at just over 42.6 million shares (still well under peak of 62 million before)..
Kraft Foods (NYSE: KFT) is 105.21 million, SAME AS BEFORE after having been cut during the Cadbury deal.
M&T Bank Corp. (NYSE: MTB) is 5.363 million, SAME AS BEFORE after having been previously cut.
Moody’s Corp. (NYSE: MCO) is a SLIGHTLY LOWER POSITION AGAIN at 28.4+ million versus 28.8+ million before; the sales continue here.
Procter & Gamble (NYSE: PG) is SAME AS BEFORE at over 76.7 million shares, but this is lower than the recent times of 96.3 million shares.  ONE OF BUFFETT’s 10 BEST INVESTMENTS EVER!

MANY EXITS…

Lowe’s Companies (NYSE: LOW) WAS SOLD ENTIRELY after Buffett having sold off Home Depot Inc. (NYSE: HD) a quarter ago.
Nalco Holding (NYSE: NLC) was previously 6,142,300 shares but BUFFETT SOLD ALL.
Nestle ADR’s had been 3.4 million shares before BUT BUFFETT SOLD ALL NESTLE.
Nike Inc. (NYSE: NKE) had already been decreased to 3,642,929 shares, but BUFFETT SOLD ALL NIKE.

BUFFETT HOLDINGS A to I

BUFFETT HOLDINGS S to Z

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JON C. OGG

These positions include ConocoPhillips (NYSE: COP), Costco Wholesale Corporation (NASDAQ: COST), Becton, Dickinson and Company (NYSE: BDX), Fiserv, Inc. (NASDAQ: FISV), Nalco Holding Company (NYSE: NLC), Torchmark Corporation (NYSE: TMK), and USG Corporation (NYSE: USG).  A couple of these stocks were above their implied target prices, but some only had upside of 1% to 3%. This compares to Buffett’s largest implied upside picks which had more than a 10% hurdle.

We used the closing price as of  December 6 for the analysis.  We gave a percentage upside based on how much the stocks had to move to reach the Thomson Reuters consensus price target for a year from now.  We reviewed the prospects of each company which includes a brief description of the firms, how the shares have performed versus a 52-week range, and analyzed the dividend yields of each corporation.

ConocoPhillips (NYSE: COP) closed Monday at $64.18, above the oil giant’s consensus price target of $62.81.  Buffett kept his stake in the last quarter unchanged but that is after cutting his position over the past several quarters. He has indicated he might sell the stock for tax purposes but he has retained a  modest ownership position.  Conoco at least offers a 3.4% dividend yield.  Buffett admitted that the timing of this investment was wrong, but the good news is that shares are up more than 50% from the lows in 2009.

Costco Wholesale Corporation’s (NASDAQ: COST) stock is one of the few that has consistently risen lately.  It almost always trades at a premium over its peers, but that has not undermined its valuation.  After a $69.19 close on Monday, shares hit a 52-week high of $69.41.  Does it matter then that analysts have a consensus price target of $68.61 a year out?  The dividend yield here is only 1.2%. It is worth noting that shares peaked just above of $70.00 in late-2007 and in early 2008 .

Becton, Dickinson and Company (NYSE: BDX) is the first of several stocks that still have upside but that is so small that it is hardly worth mentioning.  Monday’s close for BD was $80.85, and its 52-week trading range is $66.47 to $81.65.  The consensus price target for one-year out is $82.23.  That implies an upside of only 1.7%, which is below its 2% dividend.  The shares still managed to challenge 52-week highs recently. The 52-week trading range is $66.47 to $81.65.

Ingersoll-Rand (NYSE: IR) 636,600 shares, WAY DOWN YET AGAIN… was over 5.6 million before and was 7.78 million over a year ago.
Johnson & Johnson (NYSE: JNJ) is a HIGHER POSITION listed as over 42.62 million shares; that is another increase in J&J even though well under the 62 million at the peak.
Kraft Foods (NYSE: KFT) is 105.21 million, SAME AS BEFORE after having been cut and down from the 138+ million before he was critical of the Cadbury deal.
Lowe’s Companies (NYSE: LOW) 6.5 million shares, SAME AS BEFORE.
M&T Bank Corp. (NYSE: MTB) is 5.363 million, SAME AS BEFORE after having been cut before then.
Moody’s Corp. (NYSE: MCO) is a LOWER POSITION AGAIN at 28.87+ million shares; down from 30.783 million before after several prior decreased positions.
Nalco Holding (NYSE: NLC) 6,142,300 shares; DOWN FROM PRIOR 9.15 million shares.
Nestle ADR is 3.4 million shares, SAME AS BEFORE.
Nike Inc. (NYSE: NKE) is a DECREASED POSITION of 3,642,929 shares; down from 7.641 million.
Procter & Gamble (NYSE: PG) is an DECREASED POSITION at over 76.7 million shares; versus just over 78 million the quarter before.  That is still well under the peak in recent times of 96.3 million shares.

Harley-Davidson, Inc. (NYSE: HOG) is not listed but was a not common stock so is not included in these filings; Buffett still likely holds the preferred shares and warrants.

Home Depot Inc. (NYSE: HD) HAS BEEEN ELIMINATED; previous holdings showed 2.757 million.

Republic Services Inc. (NYSE: RSG) HAS BEEN ELIMINATED after having been 10.827 million.

NRG Energy Inc. (NYSE: NRG) HAS BEEN ELIMINATED as it was 6 million shares before.

Iron Mountain (NYSE: IRM) had been increasing in the prior quarters but IT IS GONE and not listed as a holding any longer versus 8 million before.

BUFFETT HOLDINGS A to G

BUFFETT HOLDINGS S to Z

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JON C. OGG

Harley-Davidson, Inc. (NYSE: HOG) is not listed but was a not common stock so is not included in these filings; Buffett still likely holds the preferred shares and warrants.
Home Depot Inc. (NYSE: HD) 2.757 million, SAME AS last quarter.
Ingersoll-Rand (NYSE: IR) 5.636 million shares, SAME AS last quarter but way down from the 7.78 million a year ago.
Iron Mountain (NYSE: IRM) is 8 Million shares, A HIGHER POSITION versus 7,794,800 shares last quarter, and above 7 million shares and versus 3.3722 million shares in the quarters before then.
Johnson & Johnson (NYSE: JNJ) is almost41.1.3 million shares, AN INCREASED POSITION from last quarter’s 27 million shares.  This gets J&J back above the 36.91 million shares before that and on the way back up to the 62 million shares at one point in 2008.
Kraft Foods (NYSE: KFT) is 105.21 million, which is DOWN SLIGHTLY from the 106.7+ million a quarter before and down from the 138+ million before he was critical of the Cadbury deal.
Lowe’s Companies (NYSE: LOW) 6.5 million shares, SAME AS BEFORE.
M&T Bank Corp. (NYSE: MTB) is 5.363 million, A DECREASE from 5.563 million shares before that and down from 6.71 million shares before that.
Moody’s Corp. (NYSE: MCO) 30.783 million, which appears to be a decrease from what we listed as 30.83 million last quarter.  This is way down from the 48 million originally before two more quarters of decreases.
NRG Energy Inc. (NYSE: NRG) was 6 million shares.
Nalco Holding (NYSE: NLC) 9.15 million shares, UP SLIGHTLY from the 9.0 million a quarter earlier.
Nestle ADR is 3.4 million shares, SAME AS BEFORE.
Nike Inc. (NYSE: NKE) 7.641 million shares, SAME AS BEFORE.
Procter & Gamble (NYSE: PG) is 70.071 million shares; DOWN SLIGHTLY from over 78.317 million a quarter before and from approximately 87.5 million and 96.3 million in the quarters before that.
Republic Services Inc. (NYSE: RSG) is 10.827 million shares; SAME AS BEFORE but still above the prior quarter.

BUFFETT HOLDINGS A to G

BUFFETT HOLDINGS S to Z

You can join our free daily email distribution list to hear more news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, key analyst calls, and more.

JON C. OGG

Clean Harbors, Inc. (NYSE: CLH) gave projections about how much the spill clean-up was helping to boost business.  Its shares are down over 3% at $62.50 this morning after having seen prices almost $67.00 on just Wednesday and Thursday.  Its 52-week range is $49.07 to $72.14.  Shares are down about 14% from their highs during the BP event.

Nalco Holding Co. (NYSE: NLC), which makes the chemical dispersant Corexit, has many areas of operation so is less of pure-play.  With a 2% drop to $22.95 today, this peaked above $23.60 this week and the 52-week range is $16.50 to $29.25.  Shares are down over 21% from their highs now.  Unfortunately for the company, dispersants and Corexit have many issues of their own.

Newpark Resources Inc. (NYSE: NR) peaked at just above $7.00 all throughout this week so far and shares are down 2% at $6.87 this morning.  Its 52-week range is $2.26 to $8.05.  Shares are down almost 15% from their highs.

MOP Environmental Solutions, Inc. (Pink Sheets: MOPN) is an example of true penny stock purgatory and just one more sampling of dozens and dozens of routine instances where Pink Sheet stocks just do not make the grade for most investors.  The stock is down over 4% at $0.12+ this morning and was at $0.18 earlier this week and above $0.20 last week and hit $0.35 last month.  So much for the great ‘boom growth’…

Many companies do win in these disaster situations.  The problem is that the work tied to such wins is short-lived and analysts and investors always figure out that this is a revenue stream that will one day go away or be for less.

JON C. OGG