Waste Connections (WCN.TO)

Stock has had a bit of a rocky ride. They’ve had a history of missing their earnings’ forecasts. However, the last quarter they actually hit it out of the park. The company gave a pretty bullish forecast on conditions going forward. Commercial garbage is economically sensitive and now that the US economy is recovering again, the amount of commercial garbage is going up again. They are budgeting for acquisitions and he thinks they will grow that way as well as organically.

Had a dip to about $22-$23 about 1-2 years ago, and that was a bit of a buying opportunity. He finds it fairly fully valued now. Yield is not comparable to some high yields. If you own, you could Hold, but wouldn’t buy it at this price.

Just raised the dividends. Quarterly earnings were kind of disappointing, but there are brighter days ahead. Have new 1-man trucks. Management is now focusing on trying to grow the business at a smarter approach with Enterprise Value to EBITDA. Giving it 12-18 months to turn it around. Still trades at a deep valuation, compared to the bigger waste management companies. Its Canadian business is amazing.

Has been watching it. Well run business with interesting catalysts: cost cutting, and a New York contract. He is waiting for their debt to settle down a bit.

Third largest waste company in North America. It has the crown jewel assets of Canada. Sees this as a takeover candidate. Even if that doesn’t happen, the company is expanding. New management is trying to grow margins and focusing on return of investment capital, meaning a focus on technology and getting better trucks with natural gas to save money. Creating a lot of free cash flow. Targeting 50% growth in revenue by 2017. If a takeover happens, he feels the stock is worth North of $30 US.

Waste management companies can do very well in the springtime with contracts coming up for the summer. They tend to do very well from March through May. Expects this one would be no different, however the chart shows a huge double top and it doesn’t look like it is going to exceed that given the few weeks left in the seasonal period. Industrials do particularly poorly in the summertime.

There are 3 things in life that we can count on, death, taxes and garbage. Garbage is not going to go out of fashion. During the recession there was less of it as people were manufacturing less and this company suffered a little. But now, in the last 2 years, volumes have picked back up and the stock price has picked back up. He is still buying it for clients. Thinks there is room for the company to grow, both by acquisition and by organic growth. Also feels there is room for the dividend to grow. He is buying this primarily for growth, not income.

Seasonality runs into the spring time because of building activities. It runs from now until the April timeframe. You don’t typically hold it from June to August. It is currently at the resistance level.

3 things in life are sure, death, taxes and garbage. If the economy in the US picks up, there is going to be more solid waste produced. This company is bidding on a big contract in New York City. It is consolidating by buying smaller waste management companies. Missed on a couple of quarters making the stock a little bit expensive but there is big leverage on operations. As the volume picks up, margins pick up.

Have a lot of people worried during 2011-2012, but it has finally broken out. Chart shows a bear phase of 3 legs down, which is now concluded and the advance can go for a considerable time. Feels this would be a safe place to be.

Has done very well recently and he would not be jumping in at these levels. They have merged the North American operations, which is good. In the past, the stock price was held back because things were stalled out in Northeast US and they were making some strategic acquisitions in that area. With a couple of more dollars increase, he would be looking at taking some profits.

Has seen some progress in this company over the last year. Very well run company in terms of costs discipline. Also, acquisition strategy has always been very good. Had been hurt by a soft environment in the Northeast US, which seems to be less of a problem today. Expects there won’t be a whole lot of capital appreciation from here. Yield of about 2.4%.

Good strong management team did a good job of growing the business. Benefits from a steadily improving economy. 2.3% dividend that will grow.

Pretty good earnings but there is no question they have been helped by the improving US economy. Industrial waste is what has been really improving their margins. Big cash flow generator. Likes the dividend and that they buy back stock.

(Top Pick Jul 10/13, Up 23.93%) Acquisitions have been doing very well. There is still a little bit of upside.