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Waste Connections Inc. Message Board

  • in_the_know555 in_the_know555 Apr 5, 2000 3:10 PM Flag

    Shop this thing

    When is management going to realize that this
    idea of rolling up over-priced, underperforming
    companies does not excite investors anymore. Who cares that
    prices are dropping to 5x EBITDA,its too late!!You blew
    it!!Middelstadt should resign or take your golden parachutes and
    dump this thing into the lap of a company that has the
    ability to actually make investors some money. Oh, that's
    right..you clowns out there in CA. did make some money...for
    yourselves when the stock was at its peak!!

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Let's do the math:

      5x EBIDTA equals how
      much once you've thrown out all the goodwill?
      Remember, EBIDTA is a BS number. All that should matter in
      the end is BOTTOM LINE.

      Let's assume based on
      the "actual" margins from the acquired businesses
      that WCNX is paying 8x-9x PROFIT (there's a rare word
      to hear in wastecos).

      If WCNX has to borrow
      money at 10%-12% in order to acquire these businesses,
      it would seem that nearly 100% of the profit is
      going to service the interest on the debt.

      Tell
      me again how acquiring a business four states away
      helps with "synergies" and "economies of scale"? I
      checked my map and Oklahoma City is nowhere near
      SF.

      If they could use stock to paper the deals, that
      would be different. Borrowing cash in a rising interest
      rate environment is a losing proposition.

      Good
      Luck, old men! Why learn from others' mistakes when you
      can create your own! Keep pushing rope!

      Next

      • 2 Replies to NextDext
      • can_you_see_the_real_me can_you_see_the_real_me Apr 13, 2000 11:33 PM Flag

        you say something completely stupid. This time
        you�ve really topped yourself.

        EBITDA is a better
        number to evaluate than earnings. Earnings is a book
        number, or as you put it, a BS number. Remember, EBITDA
        is a proxy for operating cash flow, something
        intelligent investors scrutinize carefully. Earnings can be
        managed (i.e. manipulated). 5X EBITDA is not bad �
        essentially a 20% capitalization rate.

        If you stick to
        comments on broad strategy and non-quantitative stuff,
        your ramblings are not half bad. But every time you
        delve into financial matters, you make absolutely no
        sense. My recommendation would be to enroll in a finance
        class at your local JC before commenting on numbers
        again.

      • You have know idea what the profit margins on
        these companies are. If you did you would be investing
        in this company instead of bashing its stock. Do you
        really think that banks would let Waste Connections
        spend borrowed money on a losing deal. WMI screwed up,
        they did bad things. That does not mean that all
        garbage companies do the same thing and make the same
        mistakes. Read the numbers. Is Waste Connections making a
        profit? Will they be making a profit in 3 years? Do the
        lenders think they will? Of course, otherwise they
        wouldn't lend them the money. Plain and simple. Garbage is
        not going away. The margins are not shrinking,
        especialy when you own the landfill, the transfer stations
        and the hauling company. Give it up Dexter. No one is
        listening to you any longer. Cover your short and get out.

 
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