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Cleaning Up In Toxic Cleanup?


Inside Wall Street

CLEANING UP IN TOXIC CLEANUP?

No, Harding Associates isn't a marketing or PR firm. It's in toxic-waste cleanup--a hot investment since the late `80s. But this year, interest has waned, in part because the recession has crimped spending on waste cleanup. Even so, Harding has attracted some big investors, among them Neuberger & Berman, which is rumored to have a 4% stake.

The stock, which trades over the counter, has fallen to 13, down from its high of 25, and the company has warned that earnings for the year ended May 31 declined slightly from last year's 96~ a share. Still, says money manager Steve Leeb, president of Money Growth Management: "The stock is a rare bargain that's too good to pass up." He thinks earnings will recover smartly later this year. Leeb says the stock is selling at only about 10 times his $1.20-a-share estimate for 1992, and it's way below the price-earnings ratios of other waste-management stocks, such as Allwaste and Chambers Development. Plus, Harding is debt-free.

Since 1986, revenues have more than tripled, to $69 million, and earnings have leaped eightfold. Leeb says the growth stems from Harding's start-to-finish services. Unlike rivals, which specialize in particular areas of waste management, Harding tackles everything from initial-site inspection to full cleanup. It also designs disposal facilities for hazardous and solid waste.

What's more, insists Leeb, the industry's giants have taken notice: "Harding is the next takeover stock in the waste business."GENE G. MARCIAL


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