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Stericycle, Inc. Message Board

  • jlad14 jlad14 Feb 2, 2012 4:27 PM Flag

    1% growth ex acquisitions

    They are buying their growth and even that top line growth is slowing dramatically.

    But when you take out acquisitons, it's down to a very measly 1% growth. And for that 1% growth the market thinks you should be paying 30x EPS.

    Even if you assume they can keep acquiring company's (which they can't because they are running out of target ..hence why they're buying co's in Romania and they are running out of capital) then you are paying 3x the growth rate.

    That's the top line growth rate of course what about bottom line, well if you use their crazy method of tacking out acq expense (something only they do to my knowledge), then your left with 76cts vs 69cts last yr 4th Q or 10% (though they claim it's 11% in their press release).

    Margins are also falling.

    Where's the sunshine?

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    • Thank you for your honesty. I am long on SRCL and I am trying to understand how an investor values the risk they take when shorting a stock like SRCL.

      Especially in the face of an overall advancing market and when they can see the historic SRCL moves in revenue and guidance associated with acquisitions and returns....for which SRCL does not provide forward guidance.

      Your 1% growth observation is correct but results from an approximate $30 million returns revenue bump in Q4 2010 that did not repeat in Q4 2011; but overall return revenues were up year on year.

      Last year, I employed a classic buy on the trough and sell on the peak strategy and had significant 5 figure trading profits...not counting share appreciation....with what I think was minimal risk.

      Are you counting on some sentinel event to send SRCL down or just inciteful timing of a short position?

    • For the record, are you long or short SRCL?

74.78+0.10(+0.13%)Oct 21 4:00 PMEDT