water is a tough thing to invest in: there does not seem to be a lot of differentiation in technology for recycling or purification. At the moment i think scale (as in operational capability), integration with other infrastructure, and experience in widely varying political/social/geologic environments are the important 'differentiaters'. Even then it's probably a low margin business.
Xylem (XYL)—a spinoff from ITT that has not yet been consummated (#msg-65194266, #msg-58711301)—will be the “purest” water-technology play on the market when it begins trading later this year.