Gorman-Rupp: A Water Stock Outside the Major Indices

Gorman-Rupp has been manufac­tu­ring pumps and pump systems since 1933. These are used wherever water or other liquids need to be reliably trans­ported, such as in drinking water supply, waste­water disposal, industry, and agricul­ture.

Appro­xi­m­ately 75% of sales are generated in the United States. The remai­ning sales are distri­buted among Canada, Europe, South America, the Middle East, and Africa.

Two growth drivers that we are parti­cu­larly monito­ring

From our perspec­tive, two develo­p­ments are currently parti­cu­larly relevant for Gorman-Rupp.

The first driver is the moder­nization of aging water infras­truc­ture. The company’s pump systems are used in areas such as waste­water treat­ment, storm­water manage­ment, and drainage. These are sectors in which existing systems must be conti­nuously upgraded and expanded.

The second driver is the AI boom and the associated expan­sion of data centers. Our expert recently wrote about this in a finan­cial guide. This aspect is parti­cu­larly intere­sting to us because it shows just how much tradi­tional water infras­truc­ture and new techno­lo­gical develo­p­ments now overlap.

Gorman-Rupp benefits here from its flexi­bi­lity and geogra­phic proxi­mity to key data center locations. The pump systems are used both in the construc­tion of new data centers and in existing facili­ties, parti­cu­larly for cooling and fire protec­tion. Manage­ment now considers data centers to be among the company’s key growth drivers. Despite a slight pullback in the third quarter of 2026, Gorman-Rupp has been the most successful position in the portfolio so far this year, with a year-to-date return of +55% (as of November 4, 2026). Tareno Global Water Solutions Fund.

What impresses us about Gorman-Rupp

Gorman-Rupp excels in pump systems designed for deman­ding opera­ting condi­tions. As a relatively small company, it can respond flexibly to specific customer requi­re­ments and develop custo­mized solutions. In our view, this very capabi­lity is a key compe­ti­tive advan­tage. Added to this are decades of experi­ence, highly reliable products, and estab­lished customer relati­on­ships. Mainten­ance and repla­ce­ment parts also ensure recur­ring revenue.

For us, the key point is that Gorman-Rupp does not depend on a single trend. The company is firmly rooted in tradi­tional areas of water infras­truc­ture and can simul­ta­neously benefit from new appli­ca­tions such as data centers.

What are the risks?

As the data center business grows in importance, the stock’s perfor­mance is likely to be more strongly influenced by momentum surroun­ding artifi­cial intel­li­gence. This could lead to higher volati­lity in the short term. Added to this are economic risks, as Gorman-Rupp is depen­dent on its custo­mers’ willing­ness to invest. At the same time, compe­ti­tion in the pump market remains intense.

For us, there­fore, the question is not just where a company can grow. Equally important are the assump­tions under­lying an invest­ment thesis and the condi­tions under which these assump­tions must be reassessed.

Why Gorman-Rupp is a good fit for our invest­ment approach

With a market capita­lization of just under USD 2 billion, Gorman-Rupp is among the smaller compa­nies in our invest­ment universe. It is precisely these specia­lized small- and mid-cap compa­nies that define our invest­ment approach. Gorman-Rupp has only a small weighting in water ETFs. Due to their size, many active water funds are also unable to build signi­fi­cant positions in such compa­nies. For us, this repres­ents a key compo­nent of our active value-added approach. For many years, we have been analy­zing compa­nies across the entire water value chain and speci­fi­cally seeking out oppor­tu­ni­ties where smaller specia­lists are barely visible in tradi­tional indices.