ABOUT THIS EPISODE
Season 1, Episode 13 · 1 year ago
SHARE THIS EPISODE
Season 1, Episode 13 · 1 year ago
Waste Management - Turning Waste into Money
ABOUT THIS EPISODE
Welcome to stop talk by small capmillionaire where ordinary people make extraordinary gains. This is and stockmarket education, podcast that focuses on stock market and company analysts.This podcast is for education purpose and should not be considered asinvestment or stock advice. This podcast focuses on stock in westpentideas and we employ independent thinking and unbiased opinion for moreinformation on our strategy of stock andlessness visit, www dot, small capmillionaire com or check out our book small cap millonnaire on Amazon. Youcould also look at a free course on Yudemi called a stock talk that weoffer. Thank you for listening and...
...please subscribe for Wickley InvestmentIdeas. We are present on spotify apple podcast or Google podcast breeding severyon to day. We are goingto discuss a great valo play today. The topic is turning waste into money andthe company that weare discussing is based management. I have beenpersonally tracking this company for a while, and I just invested two or threedays back, because I consider it to be a great value play. So what is thiscompany? So Waste Management Ink? The symbolist WM provides wase managementservices, including collection transfer, recycling recovery, disposal services.It operates ways to energy facilities to the company, serves muncipalcommercial, Industryal, residential customers throughout North America,with high presence being in United...
States as well as Canada. The Holding Company Waste ManagementTops the heap in US solid wase management through its subsidiuies. Thecompany serves millions of residential industrial mincipal and commercialcustomers in US and Canada. Wase management provides, was collection,transfer, recycling and thesourcial recovery and disposal services. Itcites include more than two hundred and fifty owned and operated Landfeld, soit is. It has the industry's largest network of landfills. More than threehundred transperstations and hundred material recovery facilities.Collection services account for more than fifty percent of sales, so itscollection is done through different transport tracks. Operation Revenuesfrom Beast Management Collection accounts for more than sixty percent oftotal companies. Revenue, landfill revenue accounts for twenty percent.The rest comes from transferof thabage.
So what's the unique Waste ManagementIsposition to increase it abette and free cash flow? So it's earnings beforeinterest, stats, e appreciation and amotization that is abetter itsearnings. It is expected to increase it, and free cash flow is in excess of PeerGroup averages so compared to the average wase management industry. Thefist crash plow is high, given it emphasis on operating discipline andacquisition of advance disposal. So advance disposal is an different formthat this company is trying to acquire and advace disposal. It's a leadingindustry player in solid waste platform, so it is more into recycling andadvance displosal services like industrial waste and medical wast. Itdeals with that benefits from scale. It is a very largecompany so that at its meajor benefit it is leader in matcher, solid wasedmarkets. Wase management, revenue of...
...fifteen billion is almost fifty percenthigher than it closes competitors republic services and about triple thesize of waste connection. So it's an industry, behement low ISL and gas price may lead toexpansion of margin, so most of its cost is gas powerd trucks that it usesto collect all this waste. So low oil prizes is going to benefit this companyand it could lead to expansion of margins. Wase Management continues todevotes most of its Free Casfloar to capital returns with dividendaccounting for forty to fifty percent of total, so it is actually making freecastflow and distributing that free cast flow in dividence. What is cuvid nineteen impact, so WoliWase management, solid waste focus...
...operations are well positioned towithstand the sharp downturn and economic activity, because it's so big,though the company may see a negative shit shift in its business mix. Theretidential benef residential business could benefit at the expanse at theexpense of commercial and industrial revenue, which would negatively affected marginsand earning o recycling could stabilize after a two year downton. So it's itmay take a year or two to recover to its two thousand and nineteen figures,though, energy service activity could erode, given the collapse and recountso energy, business or energy recycling that it does, it's going to be impacted,which would be compensated by hospital waste management. So a lot of hospitalsare generating huge amount of waste right now, which is increased becauseof more mask being used more glasswin use, and this will also flow into thecommercial space. So a lot of...
...industries, commercial spaces as wellas even residents, would start using medical grade and ninety five masks aswell as gloves once we start coming back to ourjobs, so that would compensate for Luer energy disposal. Business Advancedisposal acquisition will likely close in second quarter rather than firstquarter because of cuvet outbreak. Now, abitter growth is two percent inquarter, one, including one percent growth in the revenue and a thirtybasis, point margin, expansion, margin, expansion is because of oil and oil.Low Oil prizes. EPS Of Ninety four cents is one point four percent downwhen the free cash flow is of three. Ninety four million is down ninepercent, so it is taking a hit in earnings as well as cash flow right now,but the hit is much less than restaurants or airlines which have beendevastated, K, financial point, current...
...market price of hundred and one is tenpercent low than it's highest dividend. Ailis two point oneforcent to point one: four percent and last five years average dividend growthis six point, six, four percent. So, every year your dividend is going bysix and a half percent for last five years, and the dividend deal is quitegood too. Now this is a key point. Insiderholding in this stock has gone up by around five percent, so insiders havebought this stock, which is a good sign in this downtown cashper Sareis ninepoint one two, which is a ca and it has shown a cash growt rate of six percent.Cash per share is excellent as well as there is growth in cash H. Return onenquity is very good for this company, twenty five percent, so it shows somekind of growth to interest covery ratos six point three percent, so tes sixtimes earnings has compared to its...
...interest. So even if the earningsitting by let's IC ten fifteen percent it, it is not defaulting on itsinterest, commitment and that' great ser Daes, a good balance sheet and goodincome statement deat to ass. A racier is fifty pointthree which is high, but it is a norm in this business because you finance alot of waste collection activitieis using that prize earning its below itsfive year average, so not a very expensive price point to buy at drop inrevenue from fifteen point five billion to fourteen point: Eight, so not muchdrop in revenue. It is going to so show some drop from fifteen point five tofourteen point, eight billion, but it would expect to recover itself in twothousand and twenty once or one year from now, O thosand and twenty one. Therevenue could show an increase. Two fifteen point: six pillion, so revenuerecovery would happen in Moneye. Earning pershare drop is from fourteenpoint six per share to thirteen point...
...six per share, so there is drop inearnings as well as revenue, but it would be back in two thosand and twentyone. Cash Reserve is around three point: five billion, so it as an excellentcash position to withstand is pandemic verdict, great plain recycling andwaste management. My theme that I invested in this company is like Chinais not going to date, US garbage anymore. It is focusing more on andEnvironment Anitus, reduce it wase management capacity. So it's not goingto take us Garbet, so we have to have domestic capacity to recycle, so it isa great value play and it it is in the theme, I'm believing in a theme of moredomestic production and more domestic activities, so anm, believing that thiscuvid nineteen would lead to decrease globalization. So more domesticproduction, more recycling, everything...
...so it plays into that theme. Price Mayremain depressed as it is in a mattur industry, so not much growth and itlacks catalist for exponential growth, but it is compensated by having goodgrowth and dividend a dividend. Growth Rit has been fantastic d. This is agreat value and divident play focus on safety. So this talk is quite stable,low volatility as a beat of zero point seven. So it's has a volatility lessthan the market, and also waste management is an essential service. Soyou cannot deal. Gir cannot do away with waste management and we are goingto generate large amount of medical waste because of mast and gloves thatwe are using, so it could compensate for Oiland gas waste reduction. Sothat's the theme I'M P.
In-Stream Audio Search
NEWSearch across all episodes within this podcast