Progressive Waste (BIN): A 'Trash' Stock that Shines - Barron's
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Price: $31.61 --0%
Rating Summary:
6 Buy, 10 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Rating Summary:
6 Buy, 10 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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Progressive Waste Solutions (NYSE: BIN) shares are trading higher Wednesday as Barron's believes the stock might be a better growth play than larger rivals.
Shares trade for about 16x fiscal 2012 EPS estimates, cheap when compared with similarly-sized Waste Connections (NYSE: WCN), which trades at about 20x forward earnings. Progressive pays a 12.75 cent quarterly dividend, which yields 2.5 percent, compared with Waste Connection's 7.5 cent dividend, yielding just 0.9 percent.
For fiscal 2011, Progressive should see 19 percent in profit growth, slowing to 16 percent in 2012.
Shares hit a recent 52-week low of $18.93 on August 11th, as investors targeted the company following lower oil prices. According to Barron's, Progressive derives about one-third of its Canadian revenue from the oil fields in Western Canada, where it disposes of regular garbage, along with drilling waste. As prices dropped, fears that less drilling would take place gripped investors, causing them to shift exposure.
One analyst from Wunderlich noted the community wasn't taking into account the breakeven point on drilling in oil sands, which is about $50 to $60 per barrel if new capital is needed, or $30 to $40 if capital is already in place. At the lowest point, crude prices still stayed comfortably in the $80 price range.
Investors also took the timing of CEO Keith Carrigan as a surprise. COO Joseph Quarin will take the helm at the end of 2011, and many analysts think he should be a suitable successor.
Concerns still swirl around Progressive's construction waste business, which took a hit during the housing bust.
But Progressive also focuses more on denser urban areas, making the acquisition of more customers along existing routes and easier, and more profitable, task. Further, Progressive runs into less antitrust issues than larger peers Waste Management (NYSE: WM) or Republic Services (NYSE: RSG) when making acquisitions. Progressive is able to grow at a faster rate than larger rivals in having to deal with less red tape.
Last quarter Progressive reported a 47 percent in free cash flow to $64.78 million, while six-month free cash flow increased 57 percent to $135.34 million.
With high barriers to entry, ability to grow through acquisitions, high amounts of free cash, and the need to dispose of trash being recession-proof, Progressive may be a "trash" stock that shines.
Shares are 4.8 percent higher Wednesday.
Shares trade for about 16x fiscal 2012 EPS estimates, cheap when compared with similarly-sized Waste Connections (NYSE: WCN), which trades at about 20x forward earnings. Progressive pays a 12.75 cent quarterly dividend, which yields 2.5 percent, compared with Waste Connection's 7.5 cent dividend, yielding just 0.9 percent.
For fiscal 2011, Progressive should see 19 percent in profit growth, slowing to 16 percent in 2012.
Shares hit a recent 52-week low of $18.93 on August 11th, as investors targeted the company following lower oil prices. According to Barron's, Progressive derives about one-third of its Canadian revenue from the oil fields in Western Canada, where it disposes of regular garbage, along with drilling waste. As prices dropped, fears that less drilling would take place gripped investors, causing them to shift exposure.
One analyst from Wunderlich noted the community wasn't taking into account the breakeven point on drilling in oil sands, which is about $50 to $60 per barrel if new capital is needed, or $30 to $40 if capital is already in place. At the lowest point, crude prices still stayed comfortably in the $80 price range.
Investors also took the timing of CEO Keith Carrigan as a surprise. COO Joseph Quarin will take the helm at the end of 2011, and many analysts think he should be a suitable successor.
Concerns still swirl around Progressive's construction waste business, which took a hit during the housing bust.
But Progressive also focuses more on denser urban areas, making the acquisition of more customers along existing routes and easier, and more profitable, task. Further, Progressive runs into less antitrust issues than larger peers Waste Management (NYSE: WM) or Republic Services (NYSE: RSG) when making acquisitions. Progressive is able to grow at a faster rate than larger rivals in having to deal with less red tape.
Last quarter Progressive reported a 47 percent in free cash flow to $64.78 million, while six-month free cash flow increased 57 percent to $135.34 million.
With high barriers to entry, ability to grow through acquisitions, high amounts of free cash, and the need to dispose of trash being recession-proof, Progressive may be a "trash" stock that shines.
Shares are 4.8 percent higher Wednesday.
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