I'm Reiterating my Buy rating for Waste Management (NYSE: WMI), first recommended on March 25, 2009 at a price of $25.74. Look for rough sailing for the remainder of 2009 for Waste Management, and that should limit the topside to shares for Q3 and Q4. Still, any sign that the U.S. economy continues to strengthen will send institutional investors back into WMI, on increased demand for both trash and recycling services.
Otherwise, WMI's business model remains attractive: the company serves about 21 million residential, industrial, commercial, and municipal customers in the United States and Canada, hence the risk/return remains favorable. The FY2009/FY2010 EPS estimates for WMI are $2.01 to $2.20.
Stock Analysis: Waste Management is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in WMI now; then buy another 25% in three months, if U.S. economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your WMI position before October 2009. Sell/Stop Loss if you were to buy shares in this company: $17.
- -
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
Twitter finally reveals revenue ambition, wants to be Google -- but not yet
Google says: Chrome for Christmas
Why is gold marching higher? Ask the central bankers
