No one can escape the lure of turning waste into wealth. Here is a stock investment opportunity from the Waste Management Services Industry. The company is only marginally profitable at this juncture, but there are clear indications of better times ahead.
Consider the macro scenario first. Growing environmental consciousness translates into better future potentials for all entities that can handle hazardous materials. Margins in this business are sure to improve as social costs are built into pricing structures for all products and services.
This particular stock has some unique strength over its peers. The company is based in Burlington, ON though the stock is listed on NASDAQ. Its main areas of operation are in the highly environment-conscious climes of British Columbia. The company also covers the vacation paradise of Florida.
Expertise, physical assets, and logistic networks are crippling barriers to entry into the waste management business. The company services thousands of industrial clients and individual residences, and it is most unlikely that customers will find alternative service providers.
The mid-August 2008 stock price is still some 15% away from the 52-week high of $10.74. The Beta is 0.87, with Earnings per Share at 0.25. Sales have grown smartly at 21% on a Trailing Twelve Months Basis, with indications that the trend could accelerate. The Gross Margin has touched nearly 35% during this period, so volume growth will boost profits disproportionately.
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