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Stericycle, Inc. Message Board

  • shortofaname_99 shortofaname_99 Apr 24, 2013 4:53 PM Flag

    SRCL fair value $60

    Put a 16x multiple on EPS and this is a $60 stock. EPS growing only 12% per year, no dividend, lot of acquisitions. Huge downside.

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    • From M/L:

      Competitor Waste Management deemphasizing med waste

      According to Waste & Recycling News, competitor Waste Management is planning to divest its medical waste management business and outsource services to third-party providers for its existing customers, citing lack of scale and management expertise in the niche medical waste arena. It plans to divest its ~seven processing facilities, two of which were already sold to SRCL. While Waste Management’s medical waste business, worth an estimated $50 million, has never achieved meaningful scale, the elimination of one of SRCL’s largest
      competitors should facilitate continued market share gains in its core medical waste business and ancillary services thereon. We are making no changes to our EPS estimates at this time, but an improving competitive landscape heightens our conviction in our Street high 2013 EPS estimate of $3.72, and we are boosting
      our P.O. to $120 (from $118) on better prospects for market share gains and uptake of its ancillary services.

      New ambulance service in UK

      According to local press, SRCL will offer non-emergency ambulance services in certain areas of the UK starting Oct. 1. It was awarded a 5-year contract to provide patient courier services by the Northern, Eastern, and Western Devon Commissioning Group, replacing full service ambulance providers in an effort to improve response times and patient access for non-emergency hospital visits. The offering is only in initial pilot stages, and while financial terms and logistical details have not been disclosed, the contract can be renegotiated by SRCL if not economically favorable. While we don’t ascribe a material financial benefit to the particular offering in its infancy, the service highlights SRCL’s distinctive ability to fulfill a theoretically infinite number of unmet health care provider needs through a growing portfolio of low-cost ancillary solutions that can dramatically improve revenues and profits from its core book of 544,000 medical waste customers.

117.21+0.27(+0.23%)Sep 19 4:00 PMEDT

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