Insights: Bullish Waste Management Stocks
Garbage stocks are turning . . . up. And, it stands to reason that as the economy heats up, the amount of garbage produced should expand as well. Moreover, as production and facilities expand, so should the amount of garbage, uniforms required, maintenance performed, etc. Proof of this can be witnessed by our Manufacturing Sector posting all-time relative strength highs, a trend we expect to continue. The Groups highlighted herein reside in the Services Sector, however, as most of these stocks are contract based. Regardless, improving economic prospects should lead to price increases, which should filter down into the consumption equation. Technically, the following are the most interesting factors supporting this call:• The breadth in the Groups is healthy and improving;
• The price patterns of the Groups are bullish, which improves the probabilities of picking the right stocks;
• Our favorites right here: WM, CLH, ADSW, ECL, SDXAY, CTAS, ARMK, SRV, HCSG, and FIX.
• Bottom-fishing candidate: SRCL.
• Buys on pullbacks only: WCN, ROL, CWST, AQMS, ABM, UNF, TNC, and SP.
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ABM Industries is a provider of integrated facility solutions. The company's segments include: Business and Industry, which encompasses janitorial, facilities engineering, and parking services for commercial real estate properties, sports and entertainment venues, and hospitals and non-acute healthcare facilities; Aviation, which supports airlines and airports with services ranging from parking and janitorial to passenger assistance, catering logistics, air cabin maintenance, and transportation; and Education, which delivers janitorial, custodial, landscaping and grounds, facilities engineering, and parking services for public school districts, private schools, colleges, and universities.
Vermilion Research delivers timely, actionable, and unique research inputs to professional investors. Our research strategists highlight securities which we believe are at major inflection points, based on our various proprietary technical indicators, and offer asymmetric risk/return profiles. We believe our research methodology, which is not limited by industry sector or market capitalization, enables us to deliver superior investment recommendations.
Our process begins by organizing all actively traded stocks into coherent sectors, then into logical industry groups. We then apply our proprietary relative strength tools to identify developing price trends. Once attractive trends are identified within a selected sectors or groups, we screen for individual stocks which we believe offer the best risk/reward profile. Vermilion offers U.S. and global equity market research products. Vermilion’s research team, which has received numerous awards and accolades, has a combined 70 year of experience in the analysis of investment securities.
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