Casella Waste Systems shares gain after Jana Partners discloses stake

Investing.com -- Casella Waste Systems Inc. shares quickly gained roughly 4% on Tuesday after activist investment firm Jana Partners disclosed a new position in the company and called for operational improvements.

Jana Partners wants the regional waste services company to improve its profit margins and returns on invested capital, according to Scott Ostfeld, the firm's managing partner and portfolio manager. He spoke at the 13D Monitor Active-Passive Investor Summit in New York on Tuesday.

The Rutland, Vermont-based company has a market value of about $5.6 billion. Its shares have fallen around 11% this year and traded roughly flat over the past five years while competitors performed better.

"Improving margins and operational execution can drive returns on capital, reignite its attractive growth flywheel and unlock Casella's discounted valuation," Ostfeld said.

Jana Partners wants Casella to better align its compensation with shareholder value and publicly commit to achieving 27% earnings before interest, taxes, depreciation and amortization margins by 2029. The company reported a margin of 22.7% for its quarter ended June 30, 2026.

Ostfeld said the hedge fund wants Casella to hire a performance improvement consulting firm to better keep pace with its public rivals. Jana also pushed for this approach at Lamb Weston Holdings Inc. which has committed publicly to cutting hundreds of millions of dollars in costs.

Casella is one of the last remaining regional solid waste companies in the public market. Its depressed valuation and strong position in the northeastern United States could make it an attractive target for buyers, Ostfeld said.

Buying waste businesses has been a popular investment theme for private equity and infrastructure funds including Blackstone, EQT, Ares and TPG, and for larger industry buyers including Waste Management Inc. and GFL Environmental.

Original Article

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