RPT-IPO VIEW-Can a water stock weather the IPO dry spell?

(Repeating item that initially moved on Friday)

By Steven Bertoni

NEW YORK, April 13 (Reuters) - Energy Recovery Inc, a water purification equipment maker, has filed to go public, and the issue could see solid demand since it gives certain niche investors a new asset to chase and the company looks insulated from an economic downturn.

Energy Recovery earns almost all its money from valves used in a desalination process, so its performance is directly tied to the growth of desalination plants worldwide, whether its for high-technology manufacturing, agriculture or drinking water.

The emergence of many clean-energy and water-focused funds in the past few years also bodes well for a stock that would be a targeted water play like Energy Recovery.

"Water funds have a lot of money and a limited amount of stock to own," said Christopher Glynn, an analyst at Oppenheimer & Co Inc. "They'll be all over this thing."

Reverse osmosis makes salt water potable by blasting it through a big filter, and the company's valves can cut the cost of the process by nearly a quarter, said Tom Pankratz, a desalination consultant and editor of the Water Desalination Report.

The blasting in the reverse osmosis process requires a lot of energy, and as the company's name suggests, Energy Recovery valves help corral energy back into the desalination cycle.

The company reported 2007 net income of $5.8 million, up 143 percent from about $2.4 million in 2006. Energy Recovery is looking to raise up to $175 million for working capital and potential purchases of businesses, products and technologies.