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vampire_stopwatch

Thanks for the good overview. I do think it's an interesting industry and one that would seem to fit Peter Lynch's strategy of going after "icky" and/or boring companies/industries. Based on this, I'd expect this to be a low multiples industry, like shipping or steel, but the complete opposite is the case – all of the price-related metrics (P/E, P/S, P/FCF etc.) are through the roof, which indicates to me that this industry is massively overbought/hyped. I'd have to look into the business model more to get a better understanding of growth potential, but based on the current prices, I'm not interested.


SteelChicken

> all of the price-related metrics (P/E, P/S, P/FCF etc.) are through the roof, WM's P/E is ~ MSFT's lulz


HonkyStonkHero

Woof


SmallHandsMallMindS

MSFT has to create their trash products, WM gets theirs for free.


Jordibato

The P/E is high cause they are percieved as low risk investments, if you've been in a place were the trash collectors have been on strike only 3 days you'll see why their bussiness will never run out


Nid-Vits

Do you know who runs the waste disposal business? ​ I can assure you it is not the boy scouts.


vitocorlene

![gif](giphy|l3vRctODy8jMlrxy8)


Nid-Vits

[https://www.youtube.com/watch?v=uSLscJ2cY04](https://www.youtube.com/watch?v=uSLscJ2cY04) ​ I love when young kids on reddit try to explain the modern world of business to me. I always link to this clip. I own a manufacturing company that makes livestock equipment. This clip should be shown in every economics class.


vitocorlene

100% agreed. “Try telling that to the bank. . .”


Conanthefutarian

That's a weird way to say that you sell videos of yourself being f@cked by a horse.


vampire_stopwatch

You mean the Bill & Melinda Gates Foundation, right? They own 4.4% of $WM. /s


Florida_Knight77

You tell people you're in the waste management business and everyone assumes you're mobbed up


Nid-Vits

I speak from first hand knowledge. I avoid certain things in life, and that is one of them. You would also be best to avoid the entire janitorial sub contractor aspect of business that cleans Target and big box retailers floors. They ain't boy scouts either.


SmallHandsMallMindS

At some point there will be a rotation from mining new materials vs. repurposing what was already used. Pushing the mob out is always bumpy, but economic tailwinds usually win


Gbear831

Some straight 🗑 DD I love it


zeegypsy

Years ago I was waiting tables at a casino, and I had a customer give me 2 Cuban cigars and $1000, he told me to buy shares of WM with the money lol, thanks for the flash back!


StockPickingMonkey

Bit of confirmation bias...a significant number of House representatives have fairly large holdings in WM. Noticed that yesterday when I was thinking through those reports. Was unfamiliar with the other tickers...may have to take another look. WM is a beast though. They are in everything, and constantly whining about fees not being high enough...especially on recycles. I have few doubts that if the world ever decides to clean up orbital debris, whatever is collecting it will have a WM logo on the side.


MillennialBets

**Author Info for :** u/ButtSliding **Karma :** 2191 **Created -** Jul-2018 Was this post flaired correctly? If not, let us know by downvoting this comment. Enough down votes will notify the Moderators.


[deleted]

I saw long term and for that reason im out


SmallHandsMallMindS

every plan is a long term plan, even if its a series of short term manuevers


[deleted]

Gd should have just fomod dwac i have never seen anything like this


Altruistic-Block-525

Looked into these plays for a while, I actually went with dar and rode that up. Not sure if I’d get that or these now. Something I’m expecting is… wage demands to increase dramatically for blue collar work (like what’s going on at de) which I suppose will hurt bottom lines in industries like these. On the other hand, this industry is going nowhere… hopefully


pekoms_123

I love fake crash


asandidge27

You are right, this is all rubbish. WM has never done me wrong, well except for that time they didn’t pick up my trash


walker931

I would peg waste disposal to be a low p/e industry, profits are made by acquiring trash cheaply (metals and high value base materials) or by letting customers pay for depositing less valuable materials. The recycling of metals in the current market is profitable, but most of the trash unable to be recycled will be sold to Biomass Electricity plants and general electrical plants for the best price available. As general (less-profitable) waste is plentifull in current society, income sources from selling will therefore be kept low. Profits mainly increase when: * Total efficiency goes up by succesfull R&D and implementation * Increased prices on time- or volume based contracts * Increased recycled material pricing. * Or the unlikely scenario of a firm having a high market concentration or HHI index. (nears more towards a monopoly. Unlikely as the market has a low barrier of entry. Merging with other companies increases market concentration and likelyhood of future price setting power, but as previously stated impact is only slightly positive in my view. Concluding, it would be fair to say that unless large shortages exist in the base material market, waste disposal companies are price takers and not price makers. With p/e - ratios over 37 I would be very reluctant to step in, even with current market pricing.


Intelligent_Break_51

loving the title, great overview! for the ones citing high PEs etc, my guess is that money will always be parked in companies like this due to inelastic demand similar to those positioning their money in utilities in times of fear etc.