Waste Management (WM)

Likes both. Stable, reliable cashflows -- so they trade at a premium, but don't be concerned. All stocks that provide a "physical" type of service are doing well.

WCN is a bit higher growth, so it leads by a nose.

Likes the waste management business globally. Really hard to replicate. Wonderful assets, almost impossible to get permits for new landfills.

Problem with all that is the valuation of ~40x+ PE, which is high. Some growth. FCF yield is ~2.5%. A bit rich. If you own today, tuck it away for 10 years. He'd love to get it on sale.

Only difficulty is the technical picture for waste management -- broke 200-day MA of ~$220. Has had a bounce from $200 to $215. But trading below declining 200-week MA. 

Risk right now in the US stock market. Breadth is still narrowing. For his team, that means they shouldn't be putting on new positions.

A defensive part of his portfolio. An industry with very reliable earnings and revenue. Though stock's fallen below 200-day moving average, looks to be bouncing off $200 support. Pretty reliable earnings growth rate of ~10%, and trading at 25x forward PE. Not cheap, but there are only so many players in the space and he likes that.

More in cities, and cities tend to be more competitive. Bought Stericycle, which is fine. But he'd rather just stick with plain garbage -- more consistent, and market structure is more stable. He prefers WCN, though both are great companies.

Need, not a want. Leader in NA, at roughly 25% market share. Wide competitive moat, predicated on ownership of landfills. As you can imagine, it's extraordinarily difficult to get regulatory and environmental approvals to open a landfill. This lets them lower disposal costs and price more sharply for contracts. 

Also recycling, which is perhaps growing faster than disposal. Made an acquisition that gets them into medical waste disposal, a global secular grower. In 49 states and 6 Canadian provinces. High single-digit pace of organic growth, and he expects operating profit to grow ~10% and same with the dividend. Yield is 1.53%.

Are effected by housing construction, which is on hold. WM shares are bottoming, can buy now.

Not all the picks can be exciting names ;)  In a portfolio, it's important to have some lower beta, more defensive names (especially when mid-late cycle). Leader. Industry has high barriers to entry, which is important to him. Only a few major competitors in the environmental space in NA. (He also owns WCN.) 

Supported by secular trends such as urbanization, population growth, and more regulatory focus on sustainable waste solutions. Steady 10-12% growth rate. Yield is 1.41%.

Bigger and better than its competitor WCN.

Potential buy. Chart trending in the correct range. Excellent trend analysis. Would recommend watching. 

Likes the environmental space so much they launched Canada's first Global Biodiversity Fund, comprised of about 40 stocks. These stocks are focused on halting and reversing nature loss and restoring ecosystems. Companies like WSP, WM, and CLH will benefit from massive tailwinds driven by conservation targets.

Strong business that is good in all economic cycles. Earnings continue to grow at 11%. Fundamentally ranks at 8/10. Would recommend buying. Defensive business with stable dividend yield. High quality cash flow yields. 

Reported a tremendous quarter, and shares popped 6% today in a bad market. A good operator before, but much better now.