Among small/micro caps, there are several companies specialised in water services companies.
Recently, Vysarn and Scidev have shown a significant improvement of their earnings : since H2 23 for Vysarn and during the last 2 quarters for Scidev. They have a rather different profile : - Vysarn is mainly a regional company (based in WA), which main business remains dewatering for the iron ore giants in the Pilbara region, - Scidev is already a global company, specialised in water treatment, mainly related to the oil and gas sector and PFAS treatments, while they also have a major mining related business.
What is a bit tough with both companies is to try to define the cyclicity of their earnings. My understanding at this stage is that Vysarn may be less cyclical as it depends mainly on the production volume of iron ore in Pilbara, while Scidev is more linked to the level of exploration for US shale companies (a function also of oil prices). Vysarn is also trying to reduce its cyclicity via the development of new businesses, including a water fund management business.
Vysarn has done 2 acquisitions since its listing in 2019, which have shown significant results since their acquisition.
Anyway, both companies look interesting now that they have reached a decent level of earnings/cash flow/free cash flow, while they should benefit from a significant potential of growth for the sector in the medium term (driven in particular by the change in regulation).
