Waste Connections (WCN.TO)

It is on his radar screen. They reported weaker than expected numbers. He likes the industry long term. There are high barriers to entry. Multiples in the industry have gone up over the last few years. The recent pullback put it back on his watch list. It generates a reasonable amount of free cash flow.

He looked at it a few times, but he worried about margin pressure. After the drop it is certainly more appealing than it was before. He wants to see another quarter before making a decision. They had higher than expected operating costs last quarter and management needs to tackle this. Long term they are a good prospect.

They have a lot of US business. He has it in one of his model portfolios because he likes the 60% revenue that it produces. They have also been benefiting from lower fuel prices. There is certainly lots of competition and they have to win contracts from customers and cities to collect the garbage. Their market share is big enough and they have the scale to compete. Recently raised their dividend. Business is good. A nice solid company.

Continues to make acquisitions and has become the 3^rd largest waste management company in North America. He believes there is still room for growth. The waste management business is very fragmented in North America. The company generates a lot of free cash flow and have done a great job of improving operations. In a defensive market, this is the type of company you want to own.

Picks up garbage from industries, apartments and customers all across North America. There are 2 things he likes about this. Lower fuel costs as the cost of oil goes down, and US is about 60% of their revenue. Last quarter was pretty good, but more importantly they raised their dividend 6% last week. Dividend yield of 1.91%. A nice solid company that won’t disappoint you.

Besides death and taxes, there is sure to be garbage. It is an economically sensitive company because more economic activity generates more garbage. Lots of room for growth on the dividend and earnings. This company needs a catalyst for people to pay attention. He expects volumes and therefore earnings to go up.

They continue to merge and acquire new companies and make acquisitions in the US. Recently sold off an underperforming division. The focus for them is cost-cutting now. New trucks can be run by one operator and are natural gas operated and automated. As long as the US economy grows in the 2%-3% range, he thinks they will do fine.

(Top Pick May 21/14, Up 23.91%) Management has really cleaned up the ship. They have a 5 year plan to improve the operations. They are buying a bunch of trucks that are natural gas powered and use only one driver. He has been buying for new portfolios.

Just touched a multiyear high recently. Has been buying more of this today at around $34. They have added new trucks and are trying to increase the efficiency. He could see this as a Hold for many, many years.

He likes the waste management industry. A pretty steady business that should really grow at a GDP type level. The industry is still fairly fragmented and this company has been acquisitive. Stock has performed pretty well recently and he feels the industry is strong. A bit expensive.

It does quite well this time of year. We are in a positive uptrend and they have stable earnings.

If it is a garbage market then buy garbage. In a recession their business is still there. Liked their numbers in ’08. It is quite big and they have a good market share. The US dollar impacts 60% of their earnings and lower oil reduces their fuel costs.

(A Top Pick Jan 9/14. Up 42.75%.) In the business of trying to consolidate the solid waste management industry. It benefits from increased economic activity, particularly manufacturing because that provides more garbage. Rates and volumes have been rising. They have a lot of activity in the US which means profits are coming back to Canada and getting bumped up by the Canadian currency. He is still buying this.

(A Top Pick Jan 9/14. Up 36.25%.) Have a lot of operations in the US. Benefited from the weak Cdn$. There is a little bit of consolidation going on in the industry. This is the kind of a company that is a huge winner when fuel prices go down. Also, as the economy expands, there is more commercial garbage to get rid of.

Up nicely. Feels it is fairly fully valued, so the minimum that he would do is take some profits and continue to Hold a core position. Doesn’t have enough zip for him, so he would not enter at this point.