Dipping into Water Stocks

Water stocks are sparkling. Companies focused on collecting, distributing, and purifying the mundane and precious liquid have risen handsomely over the last year, and water management appears poised to become an increasingly vital industry in the future. However, the situation poses a dilemma to investors: With many water stocks at or near the top of their 52-week range -- including all of the ones we're featuring below -- is now still the time to jump on board? Or would it be prudent to hold off on the sector?

The answer isn't immediately clear. Debra Coy, a water-industry analyst with the Stanford Washington Research Group, says that for a sector in which there's so much interest, there are a "relatively scarce number of stocks," compared with, say, oil. This paucity may be one of the factors behind the sector's strong advance.