67 WALL STREET, New York - November 12, 2012 - The Wall Street Transcript has just published its Industrial Equipment, Aerospace and Defense Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Commercial Aviation and Energy Expenditures - Industrial Restructuring - Emerging Markets Penetration - Heightened M&A Activity - Future Growth and Market Share Gains - Increased Commercial Aircraft Production Rate - Defense Budget Uncertainty - Growth Opportunities in Data Security -
Companies include: Rotoblock Corporation (RTBC) and many others.
In the following excerpt from the Industrial Equipment, Aerospace and Defense Report, the CEO of Rotoblock discusses the outlook for his company for investors:
TWST: Please tell us about the history of Rotoblock and about your background.
Mr. Schneider: My background is hedge funds. I founded a company called HedgeCo about 12 years ago - and HedgeCo.net, I turned it to the largest hedge fund database as a Web site - and I ran the company for 12 years. We had our own broker dealer, our own investment arm and I grew the company to about $30 million market cap and sold my interest. I still have a hedge fund consultant company called Global Hedge Fund Advisors. Basically, I help hedge funds in all capacities, mostly in raising money to set up funds to handl their backlog for some of the administration.
Rotoblock is a company that became public about eight years ago, and they did a merger with a company called Daifu Waste Management, which is a medical waste company in China and Hong Kong. The medical waste industry basically consists of several public companies like Waste Management, Republic Services, Waste Connections and maybe just one other one, Stericycle, and they pretty much handle all the medical waste throughout the world except for China. China produces about a quarter or one-fifth of all the medical waste in the world. About 10 or 15 years ago, this used to be a profit center for hospitals because they sold their medical waste to different people who would take things like needles and reuse it.
About 10 years ago, Congress banned this, and so hospitals started burning medical waste and then the pollution that causes is just devastating. It is a particular problem in China, where the pollution is already incredibly high. The pollution is so bad that you can only drive your car five days a week. Next year it could be four days a week because of the pollution. It's that bad. China just changed their policy in terms of medical waste, and now they compact it.
After it is compacted, it goes into a toxic landfill where it is buried. By the way, that is also the way we do it in the United States now. It is the safest and most environmentally or greenest way of eliminating medical waste. Now, most hospitals in China are owned by the government, and the industry is completely fragmented there. If you take a look at the four other companies like Waste Management, they basically reach their growth potential that they are paying a dividend with a yield of I think over 4%. And that means that they've run out of growth areas. The same is true of Stericycle, Republic Services and Waste Connections, all public companies. All are in the billions in revenues and any investor has done very well over the years.
Rotoblock is a new entrant right now for U.S. investors, and it is an opportunity for investors to be able to capitalize on what we are doing and utilizing the U.S. markets and hopefully a strategic partner like one of the big four companies that are out there to help us grow our company. Growth in this industry is through acquisition. There are a lot of smaller companies that have groups of hospitals and dentist offices and smaller customers that can't afford to purchase machines to actually compact the waste. So they'll outsource it to someone like us, and so we have a service center for smaller ones that in the way a hospital is looked at is the amount of people it has per day or how many beds, and then each bed has a certain amount of waste that it eliminates from this.
The reason I got involved with the company is because if you take a look on just any of the large companies I mentioned before, they're about 95% institutionally owned. That means the hedge funds, mutual funds, banks, they are the ones that are the largest owners of these companies, because they're not the most exciting, but it's a cash generator that's in a marketplace, especially China and Brazil. China has a tremendous amount of people.
TWST: What is your growth model?
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.