features an commentary by Tom Fatjo, CEO of WC America (a small waste co.). He states that the industry's fundamentals have not changed. This is a conclusion that I arrived at before investing in WCNX several months ago.
Fatjo blames recent poor stock prices on negative investor attitude resulting from management judgement errors and accounting mistakes of "certain" companies. Although he does not name companies, he is obviously referring to WMI and AW.
Interestingly, he goes on to say that the depressed market has reduced earnings multiples, which creates opportunities for small, growth oriented waste companies to acquire assets at a lower cost. This concept has been also discussed by Ron M.
He does not offer specifics regarding company successes, but states that there has been 4 similar major, industry-wide, "negative attitude" down-cycles over the last 30 years. Each previous down-cycle was followed by growth companies being rewarded by higher-than-average earnings multiples.
I do not know Fatjo, but I was interested in his comments which validated some of the basic conclusions that I have arrived at. Anybody else know of Fatjo and his track record in the waste industry?
Tom was one of the original founders of BFI. He left BFI in the late seventies or early eighties to start the Houstonian in Houston. I think it had something to do in the medical field. In the mid ninties, Tom was involved with Republic Waste but got out when Mike DeGrute got involved.
Many of us investors are on the same page and that is great and I aplogize if I have not kept up on various communications between posters. It is interesting that the "doom and gloom" posters have been silent for nearly a month.
Recent market activity has validated that the waste market sector as whole was undervalued. I have been pleasantly surprised at how quickly the sector has rebounded, which exceeded my expectations, although an increase was clearly inevitable. I remain bullish on WCNX over the next 6 to 12 months.