Recent bull markets have been longer and more

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months old. Recent bull markets have been longer and more profitable than was once the case. Measuring the period from 1940 to the present, we find that the average bull market has lasted 96 months, while the S&P 500 has gained 231%. Compared against this data set, the current bull market may still have legs, as positive fundamentals (a solid economy and strong earnings growth) remain intact. AMERICAN WATER WORKS CO. INC. (NYSE: AWK) .......... BUY The AWK shares don’t typically move with the market — the beta on AWK is 0.05. American Water Works is the largest publicly traded water and wastewater utility company in the U.S. We expect it to benefit from favorable water industry fundamentals, which should result in above-average rate base, earnings and dividend growth over time. We expect earnings to be driven by infrastructure investment and subsequent rate recovery, carefully managed expenses and strategic M&A. We also note that regulated operations account for 90% of the company’s earnings. We believe management’s success in boosting operating efficiency and ROE over the past five years bodes well for future growth and warrants a premium valuation. Our target price is $105. GOOGL, NOC, TSCO, UPS, HOG, EL, SHW, WFC, NUE, IP, KMI, MA, ABBV, AZO, EAT, FB, RTN, V, EE, CELG, AMD, CAT, CHKP, GLW, DHR, UNP, HP, BA, CME Bullish 65% 5% VOLATILITY INDEX (Weekly Close) 2400-3000 132.75/149.5 19.95 16.0 - 20.0 2.71% 2.0-3.0% 1.25% 1.75-2.0% 0 10 20 30 40 50 60 70 80 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 1/15/18
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Argus Research Co. (ARC) is an independent investment research provider whose parent company, Argus Investors’ Counsel, Inc. (AIC), is registered with the U.S. Securities and Exchange Commission. Argus Investors’ Counsel is a subsidiary of The Argus Research Group, Inc. Neither The Argus Research Group nor any affiliate is a member of the FINRA or the SIPC. Argus Research is not a registered broker
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