An Ebola Waste Play Worth Paying Attention To

With Ebola in the news daily, stock traders have turned their attention to the vaccine makers - which shares have surged in recent weeks. However, today BofA/Merrill Lynch is highlighting a different Ebola play which handles Ebola waste - Stericycle (NASDAQ: SRCL).

Analyst Erin Wilson noted that The US Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) has issued a special permit to Stericycle, allowing for the transport and treatment of Category A infectious Ebola-contaminated medical waste, currently a concern in Dallas, Texas where an Ebola patient is being treated.

Given the isolation of Ebola at this point in the U.S., they don't see it having a material financial impact. However, the news "underscores SRCL's value proposition as the global leader in medical waste management, which should help to instill greater enthusiasm for the shares," according to the analyst.

Guidelines from the CDC and PHMSA highlight that Ebola-contaminated waste must be disinfected, packaged, placed in 96-gallon tote bins, and sterilized or incinerated by an authorized transporter. Given the global outbreak, this may accelerate the development of disposal protocols and escalate regulatory oversight on medical waste in other countries as well. The analyst notes SRCL is rapidly expanding its geographic footprint with operations in 13 countries, representing 29% of revenues.

The firm maintained a Buy rating price target of $126 on SRCL.

For an analyst ratings summary and ratings history on Stericycle click here. For more ratings news on Stericycle click here.

Shares of Stericycle closed at $117.94 yesterday.

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