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As societies grow and mature, so do the volumes and varieties of their wastes. There is a growing outfit in Norwell, Massachusetts that focuses on environmentally friendly ways of addressing the broad spectrum of our waste management problems.
Clean Harbors (NASDAQ: CLHB) is a leading North American provider of environmental and hazardous waste management services. The firm operates 49 waste management facilities, including commercial landfills, incineration locations, oil recycling facilities, wastewater treatment centers and polychlorinated biphenyl management plants. It provides essential services to over 45,000 customers, including some two-thirds of the Fortune 500, thousands of smaller private entities and numerous federal, state and local governmental agencies.
The firm surprised the Street last week, when it reported Q3 EPS of 63 cents and revenues of $245.5 million. Analysts had
been expecting 57 cents and $239 million. Management also guided Q4 revenues to $243-245 million, versus consensus of $238.88 million. The CEO announced strategic initiatives involving increased incineration capacity and the construction of a new solvent recovery plant. RBC Capital Markets subsequently reiterated its "top pick" rating on the stock and Wedbush Morgan repeated its "buy." CLHB shares popped on the news and then moved into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Altogether, brokers recommend the issue with two "strong buys," three "buys" and one "hold." Recent price targets are in the low- to mid-$60s. Analysts see a 26% growth rate, through the next year. The CLHB PEG ratio (1.43), Price to Sales ratio (1.17), Price to Cash Flow ratio (14.24) and Return on Equity (22.54%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 92% of the outstanding shares. Over the past 52 weeks, the stock has traded between $41.02 and $56.48. A stop-loss of $47.15 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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