How Long Before Garbage Powers Your Electricity?

• By the tickerspy.com Staff
• On 11:41 am EDT, Thursday October 15, 2009

Waste Management (NYSE: WM - News) is turning trash into treasure, and Barron's says to buy now before the business takes off.

Barron's is bullish on Houston, Texas-based garbage collector Waste Management, citing fundamentals, analyst optimism, and the potential growth of a high-tech future business. According to the report, $10 billion of Waste Management's $12 billion revenue comes from waste collection, but its $1 billion waste-to-energy business is "poised to turn heads in the future."

The process works by burning collected garbage to boil water, which generates steam to create electricity. Barron's noted that Waste Management's waste-to-electricity business will likely be eligible for renewable energy credits, although it doesn't expect the legislation to be passed in 2009.

While Barron's considers Republic Services (NYSE: RSG - News) WM's only real competition, the Waste Management Stocks Index is full of smaller plays on the sector.

Fairfield, New Jersey-based Covanta (NYSE: CVA - News) also has a waste-to-energy operation. The $2.8 billion firm has dropped fractionally over the last month, trailing Waste Management by about -350 basis points.

Clean Harbors (NYSE: CLH - News) provides environmental services for over 45,000 customers including nearly two thirds of the Fortune 500. Shares have lost -2% over the last month, placing it among the sector's worst performers for the period.

Meanwhile, Stericycle (NASDAQ: SRCL - News), Waste Connections (NYSE: WCN - News), and WCA Waste (NASDAQ: WCAA - News) have gained 5% or more in the past month.

The Shaw Group (NYSE: SHAW - News) and Casella Waste Systems (NASDAQ: CWST - News) are the only stocks in negative territory over the last week.

As of this writing, the Waste Management Stocks Index is one of the 90 worst-performing tickerspy Indexes over the last month, up a mere 1.5%.

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