The Globe and Mail reports in its Saturday edition that the trash business is basking in the sweet smell of success as investors swoop down on a sector that is generating enormous amounts of cash and thick profit margins. The Globe's David Berman notes that some of the biggest names in the sector have seen their share prices rally virtually without pause over the past few months.
Toronto-based Waste Connections rocketed to a record high above $220 on the Toronto Stock Exchange this week after the company reported upbeat fourth-quarter financial results and delivered a promising outlook. The stock is up 22 per cent over the past 12 months.
It is by no means alone with this strong performance, which points to broader interest in the sector as it crushes major benchmarks. GFL Environmental is another waste-management stock on a tear. Waste-management companies that had been delivering steady growth of 4 to 6 per cent, on average, are now increasing their revenues by as much as 10 per cent through consolidation, improved operational logistics and strong pricing power. "The garbage industry is not afraid of inflation, because they can pass it through on price," Michael Hoffman, an analyst at Stifel, told The Globe.
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