22. Investment Thesis Investment Thesis: Solid waste industry stocks are a BUY as pricing power is a secular story that should continue to drive performance. Pricing: Pricing 50-150 basis points above CPI is sustainable long term and has been achievable in spite of volume and fuel headwinds. Volumes: Volumes will continue to be a headwind (-3%) through early 2009, but should recover without hurting the pricing story. Margins: Margins should expand 100-150bps over the next 12-18 months driven by increased pricing and stabilizing fuel, while offset slightly by higher third party disposal fees. Economic Cycle: Stocks have outperformed relative to the market during recessions (+22%) and the pricing story should drive performance coming out of the down cycle. Valuation: Stocks are trading at 7.3x 09 EV/EBITDA, slightly below historical average of 7.8x. With continued improvement in ROIC, multiple expansion is warranted and should occur.
Ask yourself a question, “Why do you invest?” “ What is it you truly want to win?” Winning should be reaching your goals, having the financial capacity to achieve your life goals … … not anyone else’s. Remember, you want to build a financial house that won’t fall down in a strong wind. To do that, you need to start with a plan -- a blueprint. And one of the best plans around is asset allocation.
Ask yourself a question, “Why do you invest?” “ What is it you truly want to win?” Winning should be reaching your goals, having the financial capacity to achieve your life goals … … not anyone else’s. Remember, you want to build a financial house that won’t fall down in a strong wind. To do that, you need to start with a plan -- a blueprint. And one of the best plans around is asset allocation.
Ask yourself a question, “Why do you invest?” “ What is it you truly want to win?” Winning should be reaching your goals, having the financial capacity to achieve your life goals … … not anyone else’s. Remember, you want to build a financial house that won’t fall down in a strong wind. To do that, you need to start with a plan -- a blueprint. And one of the best plans around is asset allocation.
Since this is a very dense class, perhaps we could just go quickly through cash flows, and just explain briefly what this might mean
- It’s important to become familiar with the company itself and the sector and industry in which it is located to best evaluate it in context
- It’s important to become familiar with the company itself and the sector and industry in which it is located to best evaluate it in context
The following pitch is from March 2006
The following pitch is from March 2006
The following pitch is from March 2006
The following pitch is from March 2006
The following pitch is from March 2006
The following pitch is from March 2006
The following pitch is from March 2006
The following pitch is from March 2006
The following pitch is from March 2006
- “Elevator pitch” – be able to quickly summarize why the stock is a good pick
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