Short Ideas

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Stericycle - >>> One company's trash is another's treasure



http://www.fool.com/investing/2016/12/20/3-stocks-the-smartest-investors-are-buying-right-n.aspx?source=yahoo-2&utm_campaign=article&utm_medium=feed&utm_source=yahoo-2



Daniel Miller (Stericycle): Stericycle is a stock smart investors would be wise to take a second look at. It began as a start-up business to help hospitals manage medical waste and keep abreast of stringent and ever-changing regulations, and it's thrived over the past 25 years.

Despite its success, 2016 was unforgiving for the stock price, and it now offers investors one of the best entry points in years.

Stericycle generates about 66% of its revenue from domestic regulated waste and compliance services, which beyond hazardous and medical waste includes document and hard drive destruction. It also offers domestic communication-related service that generate about 8% of revenue, including product recall and automated communication services. Lastly, its international operations generate about 26% of its total revenue.

The company's international presence offers a great deal of growth in the years ahead, but the intriguing part of Stericycle's growth story comes from cross-selling. In fact, at Stericycle's investor day in November, management noted that only 18% of its customers have more than one of its services, which offers a long runway for cross-selling and incremental revenue from existing customer relationships.

Beyond cross-selling and international growth, an aging population and increased regulation will help drive continued demand for Stericycle's services. As costs continue to rise in the healthcare industry, large waste generators -- think hospitals, clinics, and dentists, to name a few -- will rely on Stericycle's expertise and scale to help minimize costs. Ultimately, Stericycle appears well positioned to take advantage of an aging population and rising healthcare costs, and smart investors would be wise to take a deeper dive into the company.

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