It’s not just Manila Water actually, but Maynilad as well but Maynilad services the other part of NCR (west and south side I think) which I don’t go to frequently. I just see Maynilad digging holes as well in Cavite area. But I guess it will be safe to presume that both water utility companies are full blast in to digging our highways and roads.
Manila Water holes are everywhere! So many Manila Water contractors digging and working on the pipes buried deep in our highways, main roads, even inside subdivisions. Heavy traffic jams everywhere! Is this a case of sacrifice now for better services in the future?
So what’s up with water companies digging everywhere, causing heavy traffic, mud and at times service disruptions? To an outside observer and consumer like me, it seems like they are trying to improve the pipelines, change the rusty ones, fix the leaky ones so that in the long run, services are improved.
To a potential investor, I am not really sure how this fits in the overall company value. You see hiring all these contractors is very expensive, it sure commands a very big investment on the part of water companies. I haven’t read MWCs AFS lately, but the last time I checked, they were able to improve and save a lot on waste water expense, due to these diggings and new pipe-laying.
I guess, in the long run, this is actually beneficial to the company. But not in the short-term I guess since for now, the company is at the phase of heavy investments and expenses. They will reap the benefits later, and so potential stock investors might decide to enter the stock a bit later.
I have always been a MWC fan but their share prices have not moved much in the past years. 17 levels at 2007, then 10 levels during the global recession, then now at 19. For the big investors, this price swing is actually very big already. But for small time investors like me, such gains will not be much (when compared to stocks that doubled, tripled, increased 10x just in the last couple of years).
Having said all these, I can say that MWC is stable, gives out regular dividends, and if you’re in for the long run, you might want to keep a hold of these. They recently renewed their contract with the government so they will be one of Metro Manila’s water service provider, in the next ~30 years! But, like most of the blue-chip stocks, expecting MWC to double, triple or quadruple in the near future might be asking too much too soon.
PS. They also have expansions outside the Metro and outside of the country, such as Vietnam. You might want to check as well how they are doing.
PSS. The work being done by the contractors they hire are not just expensive in terms of cash, but also in terms of reputation. To the uninformed public, the damages and hassle brought by the contractors (like irresponsible workers, lack of road signages, etc) reflect poorly on the water utilities themselves. But I guess potential investors ought to know better.