Digging Deeper for Value

 

The New Year brought a dramatic market rebound. Performance was driven by a combination of a cautious Federal Reserve rethinking its plan to increase interest rates, and a “relief rally” during earnings season.  First quarter earnings reports weren’t impressive, but stocks rallied as investors realized that earnings, while mediocre, were not nearly as bad as they could have been. This is in contrast to just a few short months ago when markets seemed to be assured of an imminent collapse.

Waste Connections (WCN) – “Every Tuesday and Thursday”

Company:         Waste Connections (WCN)
Sector:                Industrials – Waste and Environmental Services
Price/Market Cap:                        $83/$22B
Target Price/Implied Upside:     $107/30%

Thesis
Waste Connections (WCN) is the third largest waste disposal company in North America, and the only company focused on secondary and exclusive markets.  The company has flourished behind the leadership of a seasoned management team focused on consolidating fragmented niche markets where they can streamline operations, exert pricing power, and improve profitability.