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Waste Connections Inc. Message Board

  • jettcity_2000 jettcity_2000 Apr 29, 2000 8:39 PM Flag

    Future Forecasts

    I am suprised no one has commented on the strong
    quarter performance. It has validated my market entry at
    less than $11/share. I believe that conservative
    valuations suggest a great buy less than $14/share and a
    good buy less than $20/share. This is long-term view
    recognizing that the entire sector is down.

    Looking
    forward the following needs to be considered in valuing
    WCNX:

    1. Ratio of operating income to interest expense.
    This is an indication of a company's ability to pay
    down debt. To date, WCNX has been able to counter
    highter interest with verticle integration (higher
    operating margins) and lower purchase prices. However this
    ratio has dropped from 2.75 to 2.65. Further drops in
    this ratio should be examined carefully.

    2.
    Ratio of net income to interest expense. A measure of
    increasing income relative to overall purchases. Going
    forward, it would be ideal if net income increased at a
    greater rate than interest expense.

    Just some
    suggestions open to other view points.

    At these
    prices, WCNX is a great buy. Going forward, investors
    need to consider realistic projections of growth. The
    current decline in the sector is a direct result of the
    lack of investor confidence.

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    • When I entered the waste sector market a couple
      months back, I thought it could take 18 to 24 months to
      turn around. Given the strong response today, 12
      months to reach the 52-week high appears feasible.


      RSG, WMI, AW, and WCNX all showed strong gains.

    • Finally, it looks like the waste sector is going
      to climb up out of the bottom of the landfill!! I
      hope all the 'trash'talking waste bashers of late,
      were smart enough to hang on, but if they didn't, too
      bad... I'll just have to chuckle a bit for them,
      especially if they were short (can't imagine anybody doing
      that though!!).

      Jettcity, I agree with you one
      hundred percent! I have been expressing the same opinion,
      all along. I think WCNX has proven they have a solid
      plan and they integrate their acquistions very cost
      efficiently. If they continue to beat expectations, improve
      debt ratio, and continue with their tremendous growth,
      I believe they will be back close to their 52 week
      high in a year. What do you think about
      that??

      jjs

    • As a consultant to several of these firms I keep
      pretty close tabs on what goes on. I believe WMI has
      bottomed out but will be very slow to gain investor
      confidence. WMI is the bellwether for the sector but I
      believe WCNX to be the more solid performer in the next
      12-18 months.

    • someone read your post and took action. A little
      respect for WCNX. I've had this for a couple months, glad
      to see the move up. Your previous post was very
      good. Hope we see more action on the up side.

 
WCN
57.48+0.39(+0.68%)Feb 9 4:01 PMEST