Date: November 24, 2009
Source: News Room
Following on news last week that Warren Buffett bought 3.62 million shares, or 1%, of Republic Services, Barron's Magazine, in its Nov. 23 edition, quoted industry analysts who believe the waste management sector is poised for stock price gains, particularly if the economy rebounds. In addition to Buffet, Bill Gates, whose investment vehicle has built a 15% stake in Republic over the years, doubled his holdings in Waste Management to almost 16 million shares. "The billionaires are betting there's gold in trash, and they're probably on to something." The article points out that the top companies are well managed, cash flow generating enterprises sitting atop irreplaceable landfill assets while their shares are selling at a discount to the companies' estimated intrinsic value. According to Barron's, investor Todd Lowenstein of Highmark Value Momentum Fund sees Waste Management shares rising as high as $40 from their recent close of $32.30. Republic Services' Chairman Jim O'Connor has said that analysts' discounted cash-flow analysis pegs his company's value in the mid $30s range, according to the story. The article also highlights Waste Connections and notes that its third quarter profits grew by double digits while the company is buying back stock as well as purchasing assets that Republic has divested. Raymond James analyst William Fisher thinks that it could be worth $37.50 a year from now.
To see the article in Barron's, visit: online.barrons.com/article/SB125875967506458135.html#articleTabs_panel_article%3D1.