Waste Services: Cash from Trash?

(page 2 of 2)

From Standard & Poor's Equity Research

NEW TECHNOLOGY.

S&P believes municipalities will continue to turn to the private sector for help in managing their waste. Despite excess landfill capacity (averaging more than 20 years), Scharf expects major haulers to roll out price hikes at landfills, which tend to have higher margins, as third-party volume is disposed at their sites. New disposal methods such as bioreactor technology (adding liquid and oxygen to speed the degradation of waste) and composting (recycling organic yard waste into a product used as fertilizer) should extend the time period for landfills to reach full capacity.

So there you have it. From both a fundamental and momentum standpoint, S&P believes the investment outlook for the S&P Environmental & Facilities group is positive over the coming 12 months. S&P's top pick in the sector is Republic Services (RSG), ranked 4 STARS (buy).

INDUSTRY MOMENTUM LIST UPDATE.

For regular readers of the Sector Watch column, here is this week's list of the industries in the S&P 1500 with Relative Strength Rankings of "5" (price performances in the past 12 months that were among the top 10% of the industries in the S&P 1500), along with a stock that has the highest S&P STARS (tie goes to the issue with the largest market value).

Stovall is chief investment strategist for Standard & Poor's Equity Research Services.