My pick for this quarter Waste Management (WM). They are the largest solid waste management company in the US. Good chance some of you have a barrel in your basement with their logo on it, so I'm sure most of you are familiar with their services (garbage collection, recycling, landfill storage, and waste to energy production). The majority of their revenue is from government and municipal contracts.
I was looking for an industry leader, a stock that has potential for return, but at the same time is stable. If you look at their stock prices during the recent recession, they did have much of a dip. The services these guys provide are always going to be needed, and they have a pretty sizable market share on this service which i don't see being overtaken any time soon. They are a well run company and profitable.
The stock is trading close to its 52 week high ($38.50), which can be a red flag. However, the warm weather typically means more profits for WM because of the increase in waste resulting from construction projects starting up - so now might be a good time to get in.
I will talk in more detail about it on Wednesday, but take a look and let me know your comments/questions.
2 comments:
Wayne Huizenga is one of my favorite entrepreneurial figures. He started the company with the purchase of a single trash truck and drove around his neighborhood hauling junk for a fee. Then he bought a local company out, and another and another. He eventually bought over 100 companies and swallowed them up before trimming the fat and taking WM public within like 10 years. Incredible.
What's also incredible is how the company repaired their reputation after the accounting scandle back in the late 90s. They are now considered one the most ethical companies in their field.
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