More Valuable Than Oil.
More Profitable Than Gold.

Fellow Investor,

"By the time they vanished into the night, hundreds of homes had been razed, 11 people lay dead and the village's inhabitants faced starvation, having lost all their precious cattle."

David Blairs' recount of the "new war over oil" in South Sudan paints a bloody picture.

But the war over oil is nothing compared to the bloodshed and famine we could see as our single most important resource faces dire shortages across the globe.

I'm talking about an unprecedented supply and demand imbalance for something that every one of the world's 6.7 billion people needs every single day to survive: water.

The Global Water Crisis

Who cares how Michael Jackson died or what Billy Ray thinks of his daughter's pole dance when one out of seven people don't get enough water to drink, bathe or wash clothes.

Few Americans realize what a luxury it is to turn on the faucet for a glass of clear, cool water.

Unfortunately, every analysis we make suggests that the water shortage is going to worsen -- even here in the United States. 

Millions of people are pouring into California, Arizona, Florida -- and even my hometown in Austin, Texas -- where there just isn't enough water to support them.

The problem is, no alternative exists for water -- nothing can ever replace it.

Less than 3% of the world's water is fresh, and there's no more of it now than there was a million years ago.

But six billion thirsty people must now share it.

So a breakthrough in "water creation" technology could make early investors an absolute fortune. And we think one company has found it.

Breakthrough "Water Creation" Technology
Spells Big Profits For This Firm (And Shareholders)

Instead of expending men and materiel fighting wars over water, let's deploy those resources toward making use of what we have easy access to. 

And what we have access to is an unlimited supply of seawater. 

I look at seawater the same way I look at coal: We've got an abundant supply of it, so we might as well figure out how to use it.

Now, thanks to a breakthrough in "water creation" technology, one firm has done just that.

The company holds a key patent in desalinization -- the process of taking the various salts out of seawater and making it drinkable.

To fully appreciate this opportunity, you need to understand why it's so critical to "desalinize" water.

Here's what it boils down to:

• Saltwater is lethal to many plants.
   
• Saltwater is lethal to anyone that drinks it.

These facts render 98% of the world's water unusable except to float ships on.

For investors, this situation represents a compelling profit opportunity:

As populations increase and resources grow scarce, the desalinization market is expected to double in the next decade. 

Water is already more valuable than oil.

This firm's patented technology can make it more profitable than gold.

The company we found produces a component critical to the leading reverse osmosis technology.

Desalinization can be accomplished either by boiling seawater and condensing the steam or by blasting saltwater through a series of filters in a process called reverse osmosis. 

Either way takes a lot of energy, and reverse osmosis is considered the better of the two technologies out there. 

That's where the company we found comes in.

Its devices, employed in reverse osmosis plants, allow most of that energy to be recycled. 

This increases efficiency and lowers costs. 

In fact, without such efficiencies, desalinization can be cost-prohibitive.

There aren't a lot of players in the desalinization plant business, but the ones that exist know this firm's equipment is essential. 

The result of that reputation is a 70% market share.  

The company also boasts a 12% net profit margin. 

Its revenue is expected to jump +40% in 2010 and +30% in 2011. 

That means for every $1 million in revenue it will have this year, it can expect $1.84 million in just two years. 

Of that revenue, $221,500 will be pure profit. 

The company, bless it, has no debt.

The shares went public in July 2008 at a price of $8.50 per share.

Now, that interest is all well and good, but I want to make sure I'm clear about the organic growth rate this company is already achieving, which you can clearly see in the table above. 

From 2005 to 2008, earnings increased from $890,000 to $8.66 million, a compound annual growth rate of +76.6%.

The company achieved that standout gain in profit even though revenue only increased by +48.6% a year. 

In other words, this firm is as efficient at wringing profits out of revenue as its equipment is at recycling energy in a desalinization plant! 

As the world thirsts for more fresh water and the desalinization market grows, this company is going to grow and profit along with it.

Action to Take

I bought this stock for my Government-Driven Investing portfolio last month.

I think the stock is a compelling long-term "Buy" -- but I've got suspicions that the company is a takeover target.

Its technology is too good, its market share too robust and the shares are too cheap. 

I think it's going to get acquired by a larger competitor -- probably at a much higher price than the stock is trading at right now. 

Its product line would mesh nicely with GE, 3M or one of its competitors. 

Either way, if the company keeps on keeping on or gets bought out at a hefty premium, there will be plenty of rewards for shareholders. 

This is just one example of how we're letting the government do the heavy lifting for us here at Government-Driven Investing.

To get the name of this stock, take Government-Driven Investing for a one-year test drive today.

Or, for my current overview of the entire government-based investing scene, check out my bulletin below.

Out of the dozens of ways to profit from government action, I lay out my favorite three.

Why not take a peek now…