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Waste Connections Inc. Message Board

  • jettcity_2000 jettcity_2000 Jun 4, 2000 5:52 PM Flag

    May 22nd Waste News

    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?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • 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.

      • 1 Reply to swender_99
      • We saw a nice increase followed by a recent
        pull-back. Since most waste stocks increased by 50% - we may
        be seeing profit taking (50% is huge in this
        market).

        There remains no significant, fundamental
        difference in the way we collect, recycle or dispose
        garbage. Good companies such as WCNX will eventually rise
        to the top.

        My unsolicited advice - buy on
        the dips. If you can get WCNX below $15.00/share it
        is a no-brainer in my opinion.

    • 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.

 
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