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The near term EU bailout of Greece is still uncertain. The Troika will be auditing Greece this week. The economic health of many other EU countries also is in question. The overall strategy for dealing with the EU credit crisis problems is uncertain. Some people are saying China is headed for a hard landing, although definite evidence is not there yet. Some are worried the U.S. employment picture is worsening. The non-farm payrolls number this week may clarify that picture. A good or bad Initial claims number on Thursday may help to flesh out the picture. For the last few weeks many have been selling, out of fear of the possible negative economic events that seem to be brewing.

Nobody knows what exactly will happen. Nobody knows exactly what the market will do. However, you do know you will take the trash out every day. You know you will pay someone to come pick it up. This is true whether you are an individual or a business. Even hospitals, which have more specialized garbage, will still need it disposed of regardless of the state of the economy. In a bad economy they might have slightly less garbage, but this wouldn’t be visible in their garbage bill. Waste management is generally a slow secular grower. Some waste management companies pay good dividends. Plus the stock prices are reasonably stable even in a bad market.

A few of the stocks that should help you weather the current economic storm are: Waste Connections Inc. (NYSE:WCN), Waste Management Inc. (NYSE:WM), Progressive Waste Solutions Ltd.. (NYSE:BIN) and Stericycle Inc. (NASDAQ:SRCL). The first three of the above are standard waste management companies for residential and business waste in the United States or Canada. The last (SRCL) provides regulated waste management services such as medical and pharmaceutical waste for North America, South America, Europe and Japan.

Some fundamental financial data for these companies is in the table below. The data are from TDameritrade and Yahoo Finance.

Stock

WCN

WM

BIN

SRCL

Price

$33.82

$32.75

$20.58

$80.72

1 yr Analysts’ Target price

$39.00

$37.42

$28.75

$93.81

Predicted % Gain

15%

14%

40%

16%

Annual Dividend Rate

$0.30 (0.90%)

$1.36 (4.20%)

$0.49 (2.40%)

N/A

PE

24.49

16.35

23.79

32.42

Historical PE Range

16 to 26

12 to 22

N/A

26 to 43

FPE

19.78

13.34

16.08

25.15

Avg. Analysts’ Opinion

1.7

2.9

1.9

2.1

Miss Or Beat Amount For Last Quarter

+$0.01

-$0.05

-$0.02

$0.00

EPS Estimate for FY2012

$1.71

$2.44

$1.28

$3.21

EPS Estimate for FY2012 90 days ago

$1.70

$2.55

$1.32

$3.22

EPS % Growth Estimate for 2011

18.50%

1.90%

19.20%

11.50%

EPS % Growth Estimate for 2012

16.30%

14.00%

14.30%

14.20%

5 yr. EPS Growth Estimate per annum

16.00%

10.00%

16.40%

18.00%

Market Cap

$3.82B

$15.37B

$2.49B

$6.95B

Enterprise Value

$4.96B

$27.45B

$3.82B

$8.13B

Beta

0.60

0.55

0.61

0.16

Total Cash per share (mrq)

$0.15

$0.79

$0.11

$0.67

Price/Book

2.74

2.44

1.49

5.68

Price/Cash Flow

12.17

6.96

7.10

24.78

Short Interest as a % of Float

7.65%

7.60%

0.23%

4.97%

Total Debt/Total Capital (mrq)

45.08%

57.71%

44.47%

49.64%

Quick Ratio (mrq)

--

0.97

--

--

Interest Coverage (mrq)

7.75

4.02

4.55

7.88

Return on Equity (ttm)

11.52%

15.30%

8.24%

20.05%

EPS Growth (mrq)

50.15%

-1.67%

61.96%

3.13%

EPS Growth (ttm)

41.25%

-4.69%

35.53%

12.41%

Revenue Growth (mrq)

18.07%

5.98%

56.72%

18.03%

Revenue Growth (ttm)

11.04%

6.19%

60.67%

20.92%

Gross Profit Margin (ttm)

43.42%

92.71%

--

45.99%

Operating Profit Margin (ttm)

21.15%

15.93%

13.54%

25.20%

Net Profit Margin (ttm)

11.34%

7.75%

6.00%

14.09%

On a PE basis these stocks seem a bit over valued at first glance. However, they are such stable stocks that they historically trade at PEs higher than the S&P 500 average. However, WCN is still near the higher part of its normal range. One might not want to buy it near its likely near-term peak. WM and SRCL are near the middle of their PE ranges. WM has a 4.20% dividend. One might buy it for this. BIN has a 40% analysts predicted one year price growth estimate. You might buy it for this. Plus Canada has been generally more economically healthy than the U.S. This adds it a bit more stability. All of these stocks have very low Betas (0.16 to 0.61).

A look at the two year charts may provide some technical direction.

The two year chart of WCN is below.

Click to enlarge



This is an extremely strong chart, especially given the recent overall market fall. It looks like a stock one might want to own. However, WCN does seem to fluctuate up and down around its 50-day SMA. In August it approached its 200-day SMA. Given that it is trading near the high of its historical PE range, I would not want to purchase it now. However, I would keep it on my watch list for a near term purchase. Remember the waste management stocks have been favorites of some of the most prominent market gurus.

The two year chart of WM is below.

Click to enlarge



The WM chart has generally trended upward over the last two years. During this overall market downturn, it fell 29% to a near-term bottom. It would have to rise almost 22% to reach its previous high. If the overall market rallies soon, it may pop back up to its previous high (or near it) quickly. It’s 4.20% dividend and its low Beta of 0.55 make it a buy in this market. It is at a good technical support point.

The two year chart of BIN is below.

Click to enlarge



This chart had an uptrend going until 2011. That trend has weakened or disappeared. The stock has dived during the overall market downturn. I would buy this only on an overall market upswing. It could easily be pressured further downward. Some of its recent downward movement may have been due to the recently increasing strength of the U.S. dollar. If this situation changes, it might give BIN more of an upward impetus.

The two-year chart of SRCL is below.

Click to enlarge



SRCL had a strong uptrend before the overall market started to waver. It has faded with that market, but it is exhibiting strength. It looks set to rebound upward on any rebound in the overall market. I would wait to buy this until the market is more certainly going upward. More clarity about the Greek bailout could be the signal that turns the markets. A good non-farm payrolls number might have the same effect. This would certainly buoy China (and perhaps the EU).

Source: Don't Throw Away These Trash Companies