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Waste management sector -- >>> No Disappointments In 'Waste Land'
Nov 12 2013
includes: RSG, WCN, WM
http://seekingalpha.com/article/1830602-no-disappointments-in-waste-land?source=yahoo
The US non-hazardous solid-waste services industry generates annual revenue in excess of $50 billion, a staggering number just to keep our streets clean. Waste Management (WM), Republic Services (RSG), and Waste Connections (WCN) dominate this market, generating greater than 60% of industry revenues and controlling an equal percentage of valuable disposal capacity. The top line for the group can be expected to expand at a nominal-GDP rate, with pricing growth in the industry adding an additional tailwind thanks to recent consolidation (Republic Services/Allied Waste), a rational focus on return on invested capital, and cost pressures facing independent mom-and-pop trash companies and municipalities.
Operators generate strong and predictable cash flow. Within the collection line of a waste hauler's business, residential services provided to municipalities and individual households are on a service-based model (not-volume based) and can largely be viewed as insulated from economic pressures. Such a constant revenue stream helps to mitigate cyclical pressures in a trash taker's commercial collection and industrial roll-off lines, which also fall into the overall waste-collection category. Cell-by-cell landfill build-out provides additional flexibility with respect to capital outlays, as haulers can scale back expenditures during troubled economic times.
Year-to-date, Waste Management's third-quarter performance shows free cash flow (cash from operations less capital expenditures) of $1.03 billion, roughly 9.8% of sales, while Republic Services' year-to-date mark of $448.5 million represents 7.1% of sales. Waste Management more effectively converts sales to free cash flow, as capital expenditures (as a percentage of sales) are roughly 3 percentage points lower than those of Republic (7.9% versus 11%). We think Republic's capital requirements will steadily decline in coming years to a high-single-digit mark as percentage of sales once the hefty equipment expenditures of today are completed.
Transfer and disposal is the most lucrative revenue stream in the waste business. Landfill ownership can largely be viewed as the primary competitive advantage for a solid-waste operator. Though anyone that can finance a truck can bid on collection routes (service is undifferentiated), new entrants are at a significant disadvantage for disposal. For starters, building a landfill is expensive, time-consuming (permits can take 3-7 years to obtain, sometimes longer), and NIMBY (not-in-my-backyard) opposition has only increased with suburban sprawl. Subtitle D of the Resource Conservation and Recovery Act (1991) significantly increased the cost and complexity of landfill ownership (composite liners, leachate collection systems, zoning, etc.). As a result, many landfills in the US have been closed, and disposal airspace should only become more valuable over time.
Since collected waste must go somewhere (direct haul is only practical for 40-50 miles), the company that controls the disposal assets in a given "wasteshed" (locality) often dictates pricing. Owning the only dump in town also limits hefty tipping fees paid to other participants. Waste Management and Republic Services internalize -- dispose of into their own company-owned landfills -- more than 60% of collected waste, bolstering operating margins relative to privately-held, independent operators. Importantly, landfilling still represents the most prominent form of disposal, declining only 3 percentage points (as a percentage of generation) during the last decade. Materials recovery (including recycling) should continue its march upward, but the pace of this trend is far from tragic for the waste-hauling sector.
Waste Management's and Republic Services' third-quarter pricing trends certainly didn't disappoint. The former put up core pricing expansion of 3.9%, while the latter posted an average yield increase of 1.3% for the period. Though these numbers may not seem aggressive, they are quite meaningful across the large revenue bases of the two garbage giants. The commentary of Waste Management's CEO David Steiner regarding ongoing pricing expansion was particularly encouraging:
"In the third quarter, collection and disposal yield was 2.3%, the fifth quarter of sequential improvement, and nearly triple the yield we saw in the third quarter of 2012."
Valuentum's Take
We're huge fundamental fans of the garbage hauling industry and hold Republic Services in the portfolio of our Best Ideas Newsletter. There's really nothing too frightening about the dividend health of Waste Management and Republic given their robust free cash flow, but we're not rushing to add them to the portfolio of our Dividend Growth Newsletter on the basis of their mediocre Valuentum Dividend Cushion scores (and hefty debt loads). Still, the structural characteristics of the garbage industry are among the strongest in our coverage universe given the value of landfill ownership. We're keeping a close eye on the group.
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Stericycle -- >>> Stericycle - Replicating A Successful Strategy Abroad
Sep 23 2013
http://seekingalpha.com/article/1707662-stericycle-replicating-a-successful-strategy-abroad?source=yahoo
Stericycle Inc. (SRCL) is the domestic market leader (32% share) providing medical waste management services to large quantity (LQ) and small quantity (SQ) medical waste generators. Shares have grown by 30x since 2000 through organic investments and acquisitions. The underlying business strategy capitalizes on regulation that mandates proper collection, transportation and disposal of medical waste. SRCL grew by targeting SQ clients with basic waste services and gaining incremental revenue upselling ancillary offerings to a client base of 550k accounts. The company is introducing new ancillary services domestically and rolling up the industry abroad with the same strategy that drove robust US growth in the last decade. Accordingly, continued execution on a familiar strategy will result in sustainable, and profitable, business growth. I estimate shares are worth $151, thus offering 30% upside through FY14.
More Than Just Medical Waste Management
SRCL is essentially a one-stop shop for various medical waste needs with its core business being medical waste collection and disposal. The SRCL business model is to supplement organic growth with acquisitions for regional concentration, thus allowing for better route economies. SRCL then upsells ancillary services to existing customers once an expansive platform is in place. This approach has resulted in 10yr revenue CAGR of 17%, where upselling drives incremental margins. As an example, a base SQ customer with waste services has a mid-50's gross margin, compared to high 60's with a premium service like Steri-Safe. The company breaks out revenues by two segments - recalls & returns and regulated medical waste (RMW), of which the latter houses the ancillary business lines (please see below table for a segment overview). US operations (13% FY12 revenue growth) are currently driven by secondary services such as Steri-Safe for SQ, in addition to Sharps and Pharma Waste for LQ. Patient communication services will be rolled out to SRCL's client base in FY14 and it stands to be one of the company's greatest growth opportunities. International operations (17% FY12 revenue growth) are currently driven by Steri-Safe and will be boosted by increased adoption of ancillaries as the company increases its client base and route density. Both will act as a platform from which additional services can be delivered to existing clients internationally.
(click to enlarge)
Low-Cost Medical Waste Manager
SRCL has a leg up on the competition as it is the low-cost provider. Strategic moves by management to consolidate the industry have put SRCL in an enviable position where route density increases profitability. Management has led 323 acquisitions since 1993 with the end goal being to increase regional concentration and rationalize operations with a focus on increasing efficiency. The company now has a network of 358 collection and processing facilities that allows SRCL to undercut competitors on pricing and maintain profitability through better route economies (see chart below for facility footprint). Transportation costs eat up approximately 50% of COGS. SRCL is more efficient with its fleet spending less time driving between client locations while consuming less fuel. Without a large domestic footprint (much like its competitors - Waste Management has 23), transportation costs can reduce gross margins and erode any low-pricing advantage. Management's contributions to this strategy with prudent capital allocation can't be underestimated. Capital allocation is perhaps the most important factor for companies complementing organic growth with acquisitions. Management has executed consistently, compounding book value per share at 17% over the last 10 years, in line with revenues. Management experience gives SRCL a distinct advantage as it attempts to consolidate secondary markets to achieve low-cost provider status internationally.
Industry Growth Drivers
Industry growth benefits from both cost pressures resulting from regulation and secular trends in patient visits. Medical waste is regulated by agencies such as the Dept. of Labor (OSHA), DOT, EPA and DEA. Hazardous medical waste must be collected, transported and processed through regulated methods that require documentation and reporting every step along the way. Costs of regulatory compliance have relegated waste management to outsourcing providers who have expertise processing waste economically. The industry is now mostly outsourcing waste management due to regulation, as opposed to in-house processing as done in the late 80s when SRCL began consolidating providers. Continued US/international medical waste regulation will further drive outsourcing to specialized providers through heightened costs of regulation. The Affordable Care Act, should it ultimately come to fruition, stands to insure millions of individuals who previously lacked coverage. Accordingly, patient volumes could increase substantially for outpatient facilities (i.e. SQ business) who offer lower cost services than hospitals. Patient visits continue to move to outpatient facilities, rather than hospitals, both domestically and in Europe. Total US outpatient visits have increased 104% since 1991 while hospital admissions have remained relatively flat (See chart below). Along with this trend comes increased need for SQ clients to manage medical waste. Most SQ clients lack training and resources necessary for proper compliance and SRCL has focused on such clients for these reasons. Industry growth will also continue to be a function of selling ancillary medical services to an underpenetrated service base. Only 20-30% of SRCL's client base has adopted multiple offerings and industry providers are targeting greater adoption through sales efforts.
(click to enlarge)
Additional Color On Margins
Gross margins have more than doubled since FY96 from 21% to 45% in FY12. Two factors underlie this impressive feat. One is the transition from lower margin LQ business to a more fragmented SQ client base where pricing power is higher and where the potential revenue opportunity is greater. Typical SQ clients could generate 9x more revenue per account with premium services such as Patient Communication Services (PCS) and Steri-Safe, while LQ clients have an additional revenue opportunity of 4x. For these reasons, economics favor SQ generators where margins can be impacted to a greater extent. Second, is what I discussed above with route density. Critical mass is achieved with scale. I estimate SRCL reached an inflection point in the late 90's/early 2000's. Margins ramped 18 percentage points in a matter of four years from FY96-FY00. Incremental facility tuck-ins bolstered transportation route efficiency and profitability. The company was aggressively expanding its network as customer growth increased 490% over the same period. The below charts illustrate that critical mass (i.e. significant margin expansion) was achieved when SRCL surpassed 100-200 transportation and processing facilities. Note, the charts also evidence diminishing profitability when industry capacity becomes saturated, as could be the case in for US operations in years to come. Current operations in Europe are eerily similar to SRCL's US business in the early 2000s. Its route footprint is approaching critical mass (154 facilities FY12), gross margins run in the low 30's and revenues are predominantly LQ based. Management is replicating a familiar strategy by investing abroad in route concentration, while focusing on an untapped market of higher-margin SQ clients. It is likely international margins will trend along a similar path as US operations once critical mass is reached abroad. Fortunately, management has experience executing such a strategy, which provides compelling support that SRCL can capitalize on prospects in Europe.
(click to enlarge)
Replicating US Strategy In Europe
Since 2000, share prices have grown at a 32% CAGR on the back of margin and revenue expansion driven by an SQ focused strategy, acquisitions and upselling ancillary services in the US. Management is replicating the same strategy in Europe through industry consolidation where it can attain critical mass and low-pricing status. Europe is mostly low-margin, bulk LQ business currently and the company is acquiring competitors to increase route density while targeting high-margin SQ business (sound familiar?). SRCL must have an expansive platform in place so that it gains route economies allowing it to underprice competitors and roll-out ancillary services to win SQ clients. SRCL is gaining SQ penetration with its Steri-Safe offering. Steri-Safe is now offered in the UK, Ireland, Portugal and is soon to be rolled out in Spain where acquisition activity has been aggressive. The UK market evidences how successful this strategy has been as SQ business in the UK as a proportion of total UK revenues has grown approximately four percentage points annually to 32%. As other countries come online, it is likely SQ accounts will be similarly penetrated with consolidated gross margins expanding 200-300bps as international revenues comprise a larger portion of total revenues. Note, this process takes years to accomplish, will likely require additional debt issuances (current net debt to capital 45%) and may have a slower growth rate than the US as SRCL doesn't have an early-mover advantage in Europe. Keep in mind, Europe is not all about SQ potential. Sharps and recalls & returns operations should bolster growth for LQ accounts. Sharps business is poised to drive revenues as it has currently done in the US. SRCL recently brought a UK plant online in FY12 for its Sharps waste management and services are now offered in Ireland, Portugal and recently introduced in Spain.
(click to enlarge)
International Growth With a US Kicker
Revenue sustainability comes into question whenever double-digit growth is the norm. For SRCL, top-line growth will continue from not only international, but also from US contributions. SRCL has grown domestic revenues by a 13% CAGR since 2008 (21% internationally) through introducing niche services built off its existing distribution platform. Sharps and Steri-Safe are prime examples as each was introduced as a secondary service to gain incremental revenue and margins with existing clients. Looking long-term, the focus will shift to PCS in the US. PCS will continue to be driven by cost pressures from increased regulation, notably Medicare reimbursements for Hospitals. Current legislation details how hospitals will receive Medicare reimbursements based upon patient satisfaction surveys. Surveys address levels of physician care to quality of hospital offerings, and perhaps most importantly for SRCL, effectiveness of communication with patients. PCS allows hospitals to outsource patient communications and call management to those with such expertise. Enhanced patient relations should result from consistent contact and scheduling, 24-hour call center management and post-discharge calls, thus resulting in better survey results and higher reimbursements. Moreover, PCS alleviates cost pressures for hospitals that are investing to improve operations internally with the goal of improved treatment quality and survey results. SRCL acquired PCS providers NotifyMD and Beryl Healthcare in FY11 and FY12, respectively, and both are leaders in patient communications outsourcing. SRCL is integrating operations and technology platforms throughout FY13, and upselling this service is on track to begin domestically in FY14. If 25% of SRCL's client base signs up for PCS services, the company would stand to gain $866m-$1210m annually, thus potentially boosting revenues by 63%. Moreover, PCS gross margins currently run in the mid-40s. It's in the early stages of the growth cycle. As operations are integrated the SRCL way with a focus on efficiency gains and profitability, consolidated margins should benefit.
Geographic Based Valuation
The SRCL story will take years to play out and I am comfortable holding shares for an extended period as I believe expansion of both the top and bottom line is sustainable. Shares have consistently traded at premium valuations (1.9x the industry P/S average) and multiples will react as Europe and ancillary US growth seasons. I tend to look at valuation as a set of binary outcomes and the situation simply materializes as either favorable or not. I am comforted that the more probable outcome of the in between means I make a considerable return. In a best case scenario, shares are worth $212, and conversely, $90 in a worst case scenario. The "in between" results in a $151 price target, thus offering 30% upside through FY14 and a risk-to-reward of 3.5x. I am valuing SRCL shares by breaking down domestic and international operations and applying a proper P/S multiple to each. Since business abroad is utilizing the same SQ penetration and ancillary upsell strategy executed successfully in the US, I am assuming international will track along a similar trajectory. Valuing consolidated SRCL operations traditionally on a P/E, P/B, and EV/EBITDA basis yields similar price target results.
(click to enlarge)
Risks
I believe there are three primary risks to my thesis on SRCL. 1) PCS business is a new adjacent market for SRCL but unrelated directly to medical waste management. The company may be unsuccessful in its attempts to profitably integrate operations and then upsell PCS to its customer base. 2) Multiples could compress from premium levels if growth abroad (or with PCS) fails to materialize. SRCL is targeting SQ business in Europe for margin expansion and top-line growth, and not executing on this strategy would likely see multiples fall. 3) In the intermediate-term, margin directionality is relatively neutral for SRCL. There are signs of saturation domestically as the company has acquired lower margin business in recent years. Further down the income statement, net margins have minor tailwinds in coming years. Probable future debt issuances will offset some benefits of gross margin expansion and SG&A leverage.
Wrapping It Up
SRCL is the kind of company where you look at a historical 10y chart and kick yourself for not having the foresight to have initiated a position previously. The question then becomes is now too late and is the model sustainable for years to come? I believe the answer is undoubtedly yes since the company is undertaking a proven strategy abroad, complemented by a middle innings opportunity domestically. While I believe shares are worth $151 through FY14, holding onto SRCL could result in far greater returns for those with such patience.
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>>> Continental Prison Systems Announces Name and Symbol Change
http://finance.yahoo.com/news/continental-prison-systems-announces-name-133000446.html
IRVINE, Calif., Aug. 16, 2013 (GLOBE NEWSWIRE) -- Continental Prison Systems, Inc. (CPSZ) (the "Company") - a payment processing technology company that specializes in the $500 billion government payment space, is pleased to announce that it has received FINRA approval for the previously announced 1-100 reverse stock split, name change, and symbol change. The Company's new name will be General Payment Systems, Inc. when the market opens on September 3, 2013. For twenty business days beginning on September 3, 2013, the Company's ticker symbol will be CPSZD. After that twenty day period, the D, which signifies that the reverse stock split occurred, will be removed and the Company's new ticker symbol will be GPSI.
"Our new corporate name allows the company to more effectively convey our core purpose and intent, to become a leader in the vast municipal payment space," stated Ron Hodge, CEO, Continental Payment Systems. "While we are most appreciative of the solid footing that our successes in the corrections space have afforded us, we know for the benefit of this company and its shareholders that a brighter future lies in the penetration of the enormous municipal payment market where our proven technology has the potential to handle payments for taxes, tickets, utilities, and much, much more."
"We have already accomplished a number of important milestones in municipal payments. Now it is time to take our operations to the next level," Hodge added.
Shareholders of record at the end of trading on September 2, 2013, will be affected by the 1-100 reverse stock split. When the market opens on September 3, 2013, every one hundred (100) shares of issued and outstanding common stock will be converted into one (1) share of common stock. All fractional shares created by the reverse stock split will be rounded to the nearest whole share. If the fraction created is one half or less, it will be rounded down to the nearest whole share. If the fraction is more than one half, it will be rounded up to the nearest whole share. Each shareholder will get at least one share. The reverse stock split will also reduce the Company's authorized common stock from 2,000,000,000 to 100,000,000.
The Company's transfer agent, Action Stock Transfer, will adjust its records to reflect each shareholder's post-split position. Share adjustments to certificates can be made upon surrender to the transfer agent. Please contact Action Stock Transfer for further information and costs. Action Stock Transfer can be reached at (801) 274-1088 or info@actionstocktransfer.com.
About Continental Prison Systems
Continental Prison Systems Inc (dba EZ Card and Kiosk) is a technology company that provides government agencies with proprietary hardware (Kiosks) and cloud based software systems that automate the process of collecting payments from the general public (Cash, Debit and Credit). These systems deliver payment acceptance, real-time accounting and payment risk-mitigation services. The company distributes these technologies through direct sales, channel partners, and various licensed entities.
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>>> Continental Prison Systems Processes Record Transactions in Q1 of 2013
Jun 17, 2013
http://finance.yahoo.com/news/continental-prison-systems-processes-record-103000728.html
IRVINE, Calif., June 17, 2013 (GLOBE NEWSWIRE) -- Continental Prison Systems, Inc. (CPSZ) - a payment processing technology company that specializes in the $500 billion government payment space, is pleased to announce that the company's transactional volume for the first quarter of 2013 is its largest to date, continuing a pattern of escalating transactional volume over the past few years.
Transactional volume, in number of transactions is as follows:
2010: 238,339 transactions
2011: 399,261 transactions
2012: 526,366 transactions
Q1 2013: 172,262 transactions
"The rise in transactions is directly attributable to an ongoing expansion of locations using our technology in the corrections and municipal payment industry," stated Ron Hodge, CEO, Continental Prison Systems. "We are continuing to aggressively pursue the large market opportunity presented to this company and to deliver long term value to our shareholders."
About Continental Prison Systems
Continental Prison Systems Inc (dba EZ Card and Kiosk) is a technology company that provides government agencies with proprietary hardware (Kiosks) and cloud based software systems that automate the process of collecting payments from the general public (Cash, Debit and Credit). These systems deliver payment acceptance, real-time accounting and payment risk-mitigation services. The company distributes these technologies through direct sales, channel partners, and various licensed entities.
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>>> Continental Prison Systems Adds Kiosks in Broward County, Florida
Press Release: Continental Prison Systems, Inc.
Jun 13, 2013
http://finance.yahoo.com/news/continental-prison-systems-adds-kiosks-100000260.html
IRVINE, Calif., June 13, 2013 (GLOBE NEWSWIRE) -- Continental Prison Systems, Inc. (CPSZ) - a payment processing technology company that specializes in the $500 billion government payment space, is pleased to announce that it has been asked to expand its presence and services provided in correctional facilities located in Broward County, Florida. The expansion represents an increase in revenue potential equal to or greater than a number of Continental's current accounts.
In total, Continental will deploy four additional kiosks to accept cash at the time the inmate is booked at the facility, bringing the total to nine kiosks. By using Continental's proprietary technology, the intake/booking process will be expedited and can potentially save the jail hundreds of man hours reconciling cash on a monthly basis. The kiosks are set to launch June 19, 20, and 21 of 2013.
"The announcement of our increased presence in Broward County is a welcome addition to our revenue line and to increasing our presence in this very large county and in Florida in general," stated Ron Hodge, CEO, Continental Prison Systems. "It affirms our appeal to these institutions who are embracing our technology as a means to improve efficiency and reduce costs in their facilities."
"Additionally, Continental is finding that it has established three lines for continued expansion," Hodge added. "First, our in-house sales team led by senior management continues to drive opportunity and new agreements. But we are also experiencing organic growth from facilities like Broward County which want more technology provided by Continental. Lastly, and perhaps most significantly, our valued channel partner Archonix has been highly productive in delivering contracts in new regional markets where Continental had limited or no business presence."
"The confluence of these new business lines has created an expansion of the use of Continental's technology that is unprecedented in our history," Hodge added. "We look forward to communicating further successes as contracts are signed and we are allowed to report the events."
About Continental Prison Systems
Continental Prison Systems Inc (dba EZ Card and Kiosk) is a technology company that provides government agencies with proprietary hardware (Kiosks) and cloud based software systems that automate the process of collecting payments from the general public (Cash, Debit and Credit). These systems deliver payment acceptance, real-time accounting and payment risk-mitigation services. The company distributes these technologies through direct sales, channel partners, and various licensed entities.
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>>> Continental Prison Systems, Inc. Announces Annual Shareholders' Meeting
Continental Prison Systems, Inc.
Jun 12, 2013
http://finance.yahoo.com/news/continental-prison-systems-inc-announces-133000012.html
IRVINE, Calif., June 12, 2013 (GLOBE NEWSWIRE) -- Continental Prison Systems, Inc. (CPSZ) (the "Company") is pleased to announce its annual shareholders meeting has been scheduled for 11:00 a.m. on July 16, 2013 (the "Meeting"). The Meeting will be held at the Irvine Marriott, which is located at 18000 Von Karman Avenue, Irvine, CA 92612. A formal notice of the Meeting will be sent to all shareholders of record as of the end of trading June 14, 2013.
During the last 18 months, the Company completed private offerings totaling approximately 470,000,000 shares leaving the Company with 865,746,365 shares of common stock issued and outstanding.
At the Meeting, the Company will discuss the status of its independent financial audit and its plans to transition to fully reporting status under the Securities Exchange Act of 1934 as well as the following matters:
(i) Consideration of a reverse stock split through which the issued and outstanding shares would be reversed one for one hundred, while the authorized shares would be reversed one for ten;
(ii) Consideration of changing the name of the Company to General Payment Systems, Inc. reflecting the Company's increasing expansion into court, probation and government service payment products and services;
(iii) Such other matters as may lawfully be brought before the Meeting.
Ron Hodge, President of the Company provided the following comments: "We have a number of exciting developments in our products, services and market share which we will begin releasing to the stock market between now and the shareholders meeting. The previous 12 months have been a productive period for the Company as it secured resources sufficient to support a fully reporting public company. We are prepared to address any questions or concerns of our shareholders at our shareholders meeting and would like to thank our shareholders for their patience and support. We remain cautiously optimistic that our company's performance will now reward our shareholders and other supporters and that obtaining fully reporting status will allow our company's successes to be appreciated by a much broader constituency of retail and institutional investors."
About Continental Prison Systems, Inc.
Continental Prison Systems, Inc. (dba EZ Card and Kiosk) is a technology company that provides government agencies with proprietary hardware (kiosks) and cloud based software systems that automate the process of collecting payments from the general public (cash, debit, and credit). These systems deliver payment acceptance, real-time accounting and payment risk-mitigation services. The Company distributes these technologies through direct sales channels, channel partners, and various licensed entities.
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Continental Prison Systems -- >>> Continental Prison Systems Signs 512 Bed Butler County Prison in Pennsylvania
Channel Partner Archonix Continues to Deliver for CPSZ
Press Release: Continental Prison Systems
May 2, 2013
http://finance.yahoo.com/news/continental-prison-systems-signs-512-103000533.html
IRVINE, Calif., May 2, 2013 (GLOBE NEWSWIRE) -- Continental Prison Systems, Inc. (CPSZ) - a payment processing technology company that specializes in the $500 billion government payment space, is pleased to announce that it has signed an agreement to provide payment processing to the 512 bed Butler County Prison in Butler County, Pennsylvania. The agreement calls for multiple kiosk installations in the correctional facility. Among the services to be provided are Money Load, Bail, and Debit Release Card solutions.
"The addition of Butler County Prison is a significant addition to our ever expanding portfolio of institutions using our technology," stated Ronald Hodge, CEO, Continental Prison Systems. "Led by Archonix's powerful relationships in the region we are continuing to effectively penetrate and to drive revenue for the benefit of our shareholders."
"We view each of these events as both a clear value-add and a catalyst," added Hodge. "For us, the deal validates our trust and faith in Archonix and their reach, but these deals singularly become advertisements for our technology to a market that frequently looks to its peer group for guidance. And we are clearly and successfully filling an important need in the modern jail and prison system."
About Continental Prison Systems
Continental Prison Systems Inc (dba EZCard and Kiosk) is a technology company that provides government agencies with proprietary hardware (Kiosks) and cloud based software systems that automate the process of collecting payments from the general public (Cash, Debit and Credit). These systems deliver payment acceptance, real-time accounting and payment risk-mitigation services. The company distributes these technologies through direct sales, channel partners, and various licensed entities.
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Rollins -- >>> Rollins Expands to Guam
5-9-13
By Zacks Equity Research
http://finance.yahoo.com/news/rollins-expands-guam-194501105.html
Rollins Inc. (ROL), an established consumer and commercial services company, recently announced that it has set up a franchise in Guam through its wholly owned subsidiary Orkin, LLC.
Orkin is an Atlanta based company, and is of one of the leaders in pest control services and protection against termite damage, insects and rodents. Apart from providing services in the U.S., Orkin’s network is spread across a number of international locations as well, such as Canada, Asia, Europe and Mexico. Orkin uses a three-step method to provide its services and has also taken due care to control pests and protect against damages. It has collaborated with the Centers for Disease Control and Prevention (:CDC) and eight major universities to conduct research and spread awareness about the health hazards caused by pests.
Orkin had established its first two international franchises in Africa. The recent set-up in Guam is ideal, given the island’s typical tropical climate. Guam, a territory of the U.S. in the western Pacific Ocean, has unique pest problems persisting throughout the year. Consumers can thus avail of Orkin’s services to control the menace from pests.
The franchise is owned by Dewan Worldwide, Inc., and will provide services to both homeowners as well as businesses. Orkin will provide initial training to the franchise owners from its headquarters in Atlanta.
Rollins Inc. is based in North America and operates through its wholly owned subsidiaries, such as, Orkin Canada, HomeTeam Pest Defense, Western Pest Services and The Industrial Fumigant Company, to provide pest control services.
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Waste Management -- >>> There's a Jewel to Be Found in Waste
By Piyush Arora
May 1, 2013
http://beta.fool.com/piyusharora/2013/05/01/theres-a-jewel-to-be-found-in-waste/32020/?source=eogyholnk0000001
Investing in income-growth stocks as a way to ride out market uncertainty has always been a good strategy. But investing in just any income-growth stock could be disastrous. For this kind of investing, a company needs to have a solid balance sheet, as well as ample and consistent cash flows to sustain its payouts. One such company that meets the criteria is Waste Management (NYSE: WM), and here are a few reasons why it makes a great income-growth play.
Investors’ delight
Waste Management is known to return (quite a lot of) value to its shareholders. At current prices, shares of Waste Management yield an impressive 3.8%, while Republic Services (NYSE: RSG) and Waste Connections (NYSE: WCN) yield 2.9% and 1.1,% respectively. Waste Management pays out 80% of its earnings, while the Waste Connections and Republic Services payouts are just 28.6% and 58.2% of earnings, respectively.
Naturally, Waste Management's dividend sustainability comes into question with such a high payout ratio. But since the company isn’t planning any expansions or acquisitions, its cash flow can comfortably be directed toward dividends.
Its annual dividend burden aggregates to $680.1 million, which gets entirely covered by its trailing-12-month (ttm) free cash flow of $785 million. Moreover, Waste Management has around $307 million in cash and cash equivalents, which altogether points toward sustainable future payouts.
The company also has a $500 million share-repurchase program underway. At the current price, this represents the pending repurchase of 13 million shares, which should artificially boost its dividend yield to 3.9%. But the company isn’t stopping here.
Management said that it would be focusing on improving the company's yield along with reducing operating costs and increasing its overall operational efficiency over the next couple of years. Although management didn’t quantify the dividend boosts, it’s safe to assume that Waste Management would sustain its payouts for the coming years.
Growth prospects
On Jan. 31, Waste Management announced the acquisition of Greenstar, which is one of the largest private recycling businesses in the U.S. Last year, Greenstar recycled around 1.5 million tonnes of waste, and served around 12,000 domestic customers. This acquisition is expected to boost Waste Management’s recycling capacity by around 11% and bolster its material-refining facilities by 10%. Waste Management's management aims to process around 20-million tonnes of waste by 2020, and the acquisition bodes well with its long-term prospects.
But that’s not all. Waste Management is making strides in improving its financial health. For FY13, it expects to grow its free cash flows to between $1.1 billion and $1.2 billion (around a 52% increase y-o-y) with capital expenditures between $1.3 billion and $1.4 billion. If management is able to deliver what it promises, three things can happen here.
1.) Its dividend yield gets a boost to around 5.5%; 2.) Its board can approve another share buyback; 3.) It can repay a fraction of its total net-debt of approximately $9.2 billion
Of course, the logical move would be to lower its debt/equity of about 1.6x, which would eventually increase its net earnings (due to lower interest expenses).
For the recent quarter, Waste Management reported quarterly EPS of $0.57, which missed estimates of $0.60. However, its revenue rose to $3.4 billion, up from $3.3 billion in last year’s quarter.
Peer talk
Republic Services also disappointed the Street. Its quarterly profits stood at $127 million, down from $191 million in last year’s quarter. Its revenue also remained flat, and analysts expect its annual sales to grow by just 2% to 2.5% in FY13. Additionally, analysts estimate its annual EPS to grow by a meager 3.6% over the next five years, which is discouraging for investors.
Although the company is rapidly expanding its waste recycling capacity, its debt/equity is worsening quickly. At the end of the quarter, Republic Services had total long-term debt of $7 billion with operating cash flow (ttm) of $1.5 billion and cash of $67 million, due to which its cash flow-to-debt equates to 4.5x.
Compared to Waste Management's cash flow-to-debt of 4.2x along with cash and cash equivalents of $307 million, Waste Management is in a better position.
However, Waste Connections posted impressive results. Its quarterly net income stood at $448.8 million, which rose by a whopping 18.2% and beat the Street’s estimates of $445.7 million. The staggering growth was primarily driven by the acquisition of R360 Environmental Solutions in October, which reported annual revenue of $300 million last year.
Meanwhile, EPS of $0.37 missed the estimated $0.38 but rose by $0.02 per share as compared to last year’s quarterly results. Its stellar financial performance was due to masterful execution and a result of its relatively smaller size, which allowed Waste Connections to grow at a rapid rate. But the company isn’t involved in the waste-to-energy conversion business, which is a huge drawback.
As far as its long-term strategy is concerned, Waste Connections continues to expand in regions which aren't saturated with waste-recycling solutions (suburban areas), and offer less competition. This might be beneficial over the long run, but its management affirmed that its short-term growth lies in inorganic expansions in its existing markets.
This clearly puts Waste Management ahead of its peers.
A short conclusion
I don’t like to be a broken record, but if you didn’t already guess, I’d gladly put my money on Waste Management. The company has a high yield, which seems sustainable, and its pending share repurchases will further bolster its EPS. Furthermore, its acquisition of Greenstar and cash flow improvements suggest that Waste Management is well poised for an upside.
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Waste Mgt Sector -- >>> 8 Modern Day Alchemists Turning Trash Into Gold
December 31, 2012
by: David Kronenfeld
http://seekingalpha.com/article/1088401-8-modern-day-alchemists-turning-trash-into-gold?source=yahoo
I love the waste industry. In my former life as an investment banker, I worked with a waste management client and spent several months getting my hands dirty (no pun intended) learning the ins and outs of the industry. There are very few industries where a company is guaranteed demand for its services and can often generate revenue from the very product that it is paid to haul away (i.e. sale of recycling materials, gas collected from decommissioned landfills or electricity from waste-to-energy plants). It is also an industry where a vertically integrated company can dominate a geographic area simply by owning a few key pieces of the waste puzzle.
The chief components of the industry are the disposal trucks and related infrastructure, landfills, recycling facilities and waste-to-energy plants. Disposal trucks and their related infrastructure are easy to acquire, however, collecting trash is only the first step in the process. Unless a company has a favorable landfill contract, then it will lose money on the disposal end of the transaction. The environmental and regulatory permitting as well as geographic parameters (size, location away from NIMBY types, etc.) required to operate a landfill function as a two-edged sword. While it may be difficult to open a landfill, those same obstacles help keep competitors out of the market. For example, one of the fifteen largest municipal areas in the United States is served by only one landfill. By purchasing this landfill, one large waste company was able to guarantee that it would control the entire market as the landfill's current contracts with smaller waste collectors expire.
The past few years have been very favorable for the waste management industry as municipalities across the country have chosen to privatize their waste collection functions in order to save money in an era of tighter budgets. This has created numerous opportunities for small companies to win contracts for the waste disposal in various cities and towns. As described above, though, the big players are utilizing their financial strength to purchase the landfill bottlenecks in order to control the larger, more lucrative markets. These markets are lucrative simply because more trash can be collected (and thus more fees) with fewer resources expended as the population is concentrated. As cities continue to grow, these markets will only continue to become larger and more lucrative. Thus the larger players in the market stand to increase their top line revenues through consolidation and demographic shifts.
Below are eight of the top 50 waste companies in the U.S. as compiled by Waste 360, an excellent industry resource.
Waste Management (WM) - Waste Management is the largest waste management company in the U.S. and has leveraged its resources to branch out into various related industries (i.e. port-a-john servicing, medical waste collection, etc.). The company has also invested in over 1,000 waste collection trucks that run on compressed natural gas. Not only do these trucks offer the benefit of cleaner emissions, they also offer significant fuel savings over the life of the trucks. Waste Management is a mature company with a history of increasing its dividends and offers investors stability, a 4.2% dividend and the prospect of some limited growth as the amount of waste it handles increases.
Republic Services (RSG) - Republic is the second-largest waste management company in the U.S. and has not diversified into related industries like Waste Management. Instead, Republic has chosen to focus on commercial and household waste collection and disposal in the U.S. and Puerto Rico. Currently the company is trading at a lower P/E ratio than Waste Management, however, Waste Management's diversity and strong history of increasing its dividend probably makes it the better investment.
Clean Harbors (CLH) - Clean Harbors specializes in hazardous waste collection and disposal as well as environmental and oil and gas services. The company has traded as low as $47 and as high as $70 over the last 12 months and is currently at $52.90. Clean Harbors recently acquired competitor Safety-Kleen for $1.25 billion financed through a combination of cash on hand, proceeds from a common stock offering and the issuance of senior notes. The acquisition should be immediately accretive and dramatically expands the company's environmental services arm. Between the company's exposure to the booming oil and gas industry as well as the continued demand for environmental services, Clean Harbors is poised for significant growth.
Veolia Environmental (VE) - Veolia is a French waste management company with significant operations in the United States. Over the past two years the company has run into financial troubles and fallen from $30 to $12. Veolia currently offers a 6.4% dividend and appears to be on a better financial footing, but, despite its position as the fourth-largest waste management company in the U.S., I would avoid the stock. Any financial hiccups or a reduction in the dividend could cause the stock to fall further and, while there is significant upside, the risk associated with the upside is quite high.
Stericycle (SRCL) - Stericycle provides medical waste disposal services to clients both in the U.S. and abroad. The company has grown into one of the largest waste management companies in the U.S. through both bolt-on acquisitions and organic growth. Stericycle's aggressive growth strategy has resulted in two 2 for 1 stock splits over the last 10 years. The company has chosen to re-invest its earnings in expansion and does not currently pay out dividends. Over the last year the company has returned 15% and offers investors a financially strong company in an industry that still offers growth prospects. The only significant downside to the stock is potential fall-out from the Patient Protection and Affordable Care Act that could result in reduced margins for the company.
Waste Connections (WCN) - Waste Connections focuses primarily on waste collection and disposal in secondary markets, although the company also offers rail waste shipping services. The stock is trading near its 52-week high, has a P/E ratio higher than either Republic or Waste Management, and only offers a 1.2% dividend payout. The company acquired R360 Environmental Solutions in late October 2012, which will allow it to expand its offerings in the oil and gas environmental waste disposal sector. Despite the company's prospects for growth, I would avoid Waste Connections and invest in one of the other waste management providers listed here.
US Ecology (ECOL) - Along with Stericycle, this is one of my favorite companies in the waste sector. Based in Boise, Idaho, US Ecology provides disposal services for hazardous waste, in particular radioactive waste. With locations in Canada and throughout the western U.S., the company is well-positioned to continue its growth - it hit record earnings in Q3 of 2012. In addition to its strong growth prospects (over the past year the company has climbed from ~$18 to $22.81), the company provides investors with a 3.2% dividend yield. Although the stock is thinly traded, it is well-worth further research by investors looking to add a waste management company to their portfolio.
CSX - CSX presents investors with a play on the long-haul transportation of a wide range of waste materials. The company is the largest rail transporter of waste in the U.S. and, despite it being primarily a rail transportation company, it ranks 27th among U.S. waste companies. As cities expand and current landfills reach capacity, long-haul transportation of waste to cheaper and less regulated locations is becoming an attractive solution. CSX will benefit from this transition and offers investors exposure to a diverse array of industries.
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Cinemark -- >>> The 10 best stocks in the world
Nov 21, 2012
Kiplinger
http://money.msn.com/investment-advice/the-10-best-stocks-in-the-world-1
Stock symbol: CNK
The U.S. theater market may be relatively moribund, but growth prospects are good in emerging markets, where more people are entering the middle class and heading to the movies for entertainment.
Cinemark is one of the primary beneficiaries. The Plano, Texas, company operates 461 multiplexes in the United States, Mexico, Brazil and 11 other Latin American countries. Growth over the past five years has been blistering. In the first half of 2012, revenues jumped 11%, to $1.2 billion, and profits jumped 43%, to $93.7 million.
Cinemark probably can't keep up that pace, but the growth is far from over. The company says it plans to open 11 more theaters in 2012 and has signed agreements to open 16 in 2013 and beyond. Analysts predict that earnings will grow at a 12% annual rate over the next several years. Meanwhile, the stock, at about $24, sells for 15 times estimated 2012 earnings of $1.57 per share.
But what most impresses Osterweis' Berler is that Cinemark is delivering solid results despite a strong dollar (which results in money earned overseas getting translated into fewer bucks). That speaks to the strength of its Latin American business. If the currency head winds abate, Cinemark could clean up, Berler says.
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Waste Management Sector -- >>> 4 Waste Removal Stocks With High Valuations to Avoid Now, 2 to Watch
By Bill Edson
November 6, 2012
Tickers: CVA, RSG, SRCL, WCN, WM
http://beta.fool.com/billedson11/2012/11/06/cashing-trash-are-these-6-junk-stocks-buys/15860/?ticker=SRCL&source=eogyholnk0000001
As dirty as their businesses are, many waste management companies are not trading like garbage. Even the temporary service interruption of Hurricane Sandy did not drop valuations significantly. In fact, in its aftermath many of these stocks are trading at very dear multiples. So do investors today love trash? Investors should exercise care to make sure they are not overpaying for waste industry stocks.
Dumpster Diving
At roughly $32 per share Waste Connections (NYSE: WCN) fails to provide investors a discount for buying a waste management stock. In addition to typical waste services, including waste collection, disposal, and recycling, the company is a leading provider of non-hazardous oilfield waste treatment, recovery and disposal services in several of the most active natural resource producing areas in the United States, including the Permian, Bakken, and Eagle Ford Basins.
Investors can buy more revenues per dollar from the S&P 500, since this stock has a much higher 2.55 price-to-sales ratio, while the index has a ratio of 1.29. Waste Connections shares currently trade at a high 24.01 price-to-earnings ratio, a higher value than the 14.1 price-to-earnings ratio average of the S&P 500 index. Shares trade at a 2.20 price-to-book ratio, which is near the 2.05 average of the S&P 500. The firm is not over-leveraged based on its reasonable 0.54 debt-to-equity ratio.
Covanta (NYSE: CVA) is a waste-to-energy mid cap stock trading at glamor valuations. At a price of roughly $18, Covanta shares are trading at a rich 27.39 price-to-earnings ratio, more than twice the 14.1 average of the S&P 500. Unfortunately, enthusiasm for generating energy trash burning doesn’t make up for the high price-to-earnings multiple.
Covanta’s dividend payments offer little solace. Sure, this stock pays a hefty 3.30% dividend, which is about twice the 10-year treasury yield. However, the firm's 0.85 payout ratio is shaky since this leaves very little room for adverse events and scarce funds for reinvestment to grow the firm.
Shares of Stericycle (NASDAQ: SRCL) are are trading at roughly $95 per share. Investors can buy more than three times the revenues per dollar invested from the S&P 500, since index has a price-to-sales ratio of 1.29 while this stock has a much higher 4.43 ratio. Stericycle shares are trading at a high 31.37 price-to-earnings ratio, a price multiple more than four times the 14.1 P/E ratio of the S&P 500. Even the 5.57 price-to-book multiple of this stock dwarfs the 2.05 S&P 500 price-to-book ratio. This stock is trading like a Silicon Valley growth technology stock, rather than a stock that disposes of healthcare waste.
Shares of Waste Management (NYSE: WM) are also not fairly priced at $32 per share. This stock has been flat over the past year. Waste Management shares are trading at a fair 17.33 price-to-earnings ratio, in line with the S&P 500 average. Shares trade at a 2.43 price-to-book ratio, which is near the 2.05 S&P 500 average. The only price multiple that is in favor of Waste Management is the price-to-sales multiple: the stock's 1.12 P/S multiple is below the 1.29 average of the S&P 500.
Republic Services (NYSE: RSG) has received media attention based on share purchases by Bill Gates. Fortunately, the press coverage has not inflated the price of the stock to insane valuations. At a $26 price level, the firm's 1.27 price-to-sales ratio is in line with today's prevailing market multiples. Republic Services shares are trading at a fair 15.46 price-to-earnings ratio, in line with the S&P 500. The price-to-book multiple of this stock is 1.34, cheaper than the 2.05 S&P 500 average. Republic Services shares are also attractive for income based on a dividend yield of 3.30%, and have a sustainable 0.49 payout ratio.
Investors might want to steer clear of this stock until it grows into its dividend policy. Its high 4.30% dividend yield requires a 0.70 dividend payout ratio. This leaves very little earnings as a cushion for failure and scarce funds for reinvestment.
Fortunately, some waste management firms trade at reasonable valuations. One such stock Darling International, which is trading at a $16 price level. The firm's 1.14 price-to-sales ratio, 14.00 price-to-earnings ratio, and 1.96 price-to-book ratio are midrange in today's market. The firm is also opportunistically growing its food waste recycling empire by acquiring assets.
Investors can also look beyond publicly-traded stocks for reasonably priced investment opportunities in waste management. Small ventures like JunkIt are reinventing the trash business. Rather than focus on repeat utility-like service, JunkIt focuses on special order and one-time disposal jobs around Toronto. The firm offers different levels of service, from dumpster pick up to in-home removal. Growth in this industry can come from other innovative combinations of cleaning services and waste disposal.
Conclusion
Value investors dumpster dive for out-of-favor stocks to find cheaply-valued companies. Often the companies they find are considered disgusting or irrelevant for most investors. Value investments are the cigar butts or garbage in the world of financial assets; but at today’s prices, these garbage companies are not value investments.
Investors seeking value investments should keep an eye on Darling International and Republic Services. They are trading at reasonable valuations and could hit compelling valuations after small price declines.
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US Ecology, Energy Solutions -- >>> There's Controversy Here, but Profits, Too
By Selena Maranjian
October 29, 2012
http://www.fool.com/investing/general/2012/10/29/theres-controversy-here-but-profits-too.aspx
Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some companies focused on nuclear energy to your portfolio, the Market Vectors Uranium+Nuclear Energy ETF (NYSEMKT: NLR ) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.
The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The Market Vectors ETF's expense ratio -- its annual fee -- is 0.60%. The fund is fairly small, too, so if you're thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.
This ETF's performance is ... well, not so great. It has underperformed the world market over the past three and five years. Still, it's the future that counts much more than the past. And as with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.
Why nuclear?
If you don't like the idea of fossil fuels, or think that their demand and/or supply will run out too soon, you might want to consider nuclear-focused companies. Nuclear power has many detractors, but it also makes sense to a lot of people, and permits are being issued for more plants.
Some nuclear-power-related companies had strong performances over the past year. US Ecology (Nasdaq: ECOL ) surged 35%, for example, focusing on waste treatment, disposal, and recycling, including radioactive materials. In its second-quarter earnings presentation, management noted some work with oil and gas drilling waste, noting that it could become a new market for the company.
Other companies didn't do as well last year but could see their fortunes change in the coming years. Down 24% over the year is EnergySolutions (NYSE: ES ) , another company involved in nuclear clean-ups, even doing some work at Japan's Fukushima disaster site. It does sport positive free cash flow, but it has also been posting net losses in recent years, and carries a lot of debt. Management at the company is rather new, and in a recent conference call, the CEO noted that EnergySolutions needs to be more focused and to lower its costs, among other things.
Down 12% is Exelon (NYSE: EXC ) , America's largest nuclear-power company -- which is also involved in more traditional energy-generation businesses It's not a very volatile stock, but it's trading near a 52-week low, suffering in part because of the relatively high cost of nuclear energy in an environment of very low gas prices. The current situation won't last forever, though, and for patient investors, the stock recently yielded 5.9%. It carries a lighter debt load than many peers as well, and it's expanding into solar and wind power.
Canada-based uranium specialist Cameco (NYSE: CCJ ) shrank by about 8%, but it expects demand to pick up as gas and coal prices eventually rise, and because of new nuclear plants being built. Southern (NYSE: SO ) has permission to build two, and SCANA (NYSE: SCG ) also plans to build two. China is also expected to demand more uranium over time.
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Stericycle -- >>> Stericycle Earnings: Double-Digit Revenue Growth Continues
By Derek Hoffman
October 24, 2012
http://wallstcheatsheet.com/stocks/stericycle-earnings-double-digit-revenue-growth-continues.html/
S&P 500 (NYSE:SPY) component Stericycle Inc. (NASDAQ:SRCL) reported its results for the third quarter. Stericycle manages regulated waste and provides related services. It operates in the United States, Canada, Argentina, Chile, Mexico, Ireland, Portugal, Romania and the United Kingdom.
Earnings season is back and more important than ever. Get our newest CHEAT SHEET stock picks now
Stericycle Inc. Earnings Cheat Sheet
Results: Net income for Stericycle Inc. rose to $65.5 million (75 cents per share) vs. $59.2 million (68 cents per share) in the same quarter a year earlier. This marks a rise of 10.5% from the year-earlier quarter.
Revenue: Rose 14.1% to $480.5 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: Stericycle Inc. reported adjusted net income of 84 cents per share. By that measure, the company beat the mean estimate of 83 cents per share. It beat the average revenue estimate of $467.7 million.
Key Stats:
The company has seen double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 14.7%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 16% from the year earlier quarter.
The company has now seen its net income increase for three consecutive quarters. In the second quarter, net income rose 21.7% and in the first quarter, the figure rose 16.5%.
The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by one cent in the second quarter, by 2 cents in the first quarter, and by 2 cents in the fourth quarter of the last fiscal year.
Looking Forward: The average estimate for the fourth quarter is steady at 86 cents a share. For the fiscal year, the average estimate has been unchanged at $3.27 a share.
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Waste Management Sector -- >>> Has Republic Services Become the Perfect Stock?
By Dan Caplinger
October 25, 2012
http://www.fool.com/investing/general/2012/10/25/has-republic-services-become-the-perfect-stock.aspx
Every investor would love to stumble upon the perfect stock. But will you ever really find a stock that provides everything you could possibly want?
One thing's for sure: You'll never discover truly great investments unless you actively look for them. Let's discuss the ideal qualities of a perfect stock, then decide if Republic Services (NYSE: RSG ) fits the bill.
The quest for perfection
Stocks that look great based on one factor may prove horrible elsewhere, making due diligence a crucial part of your investing research. The best stocks excel in many different areas, including these important factors:
•Growth. Expanding businesses show healthy revenue growth. While past growth is no guarantee that revenue will keep rising, it's certainly a better sign than a stagnant top line.
•Margins. Higher sales mean nothing if a company can't produce profits from them. Strong margins ensure that company can turn revenue into profit.
•Balance sheet. At debt-laden companies, banks and bondholders compete with shareholders for management's attention. Companies with strong balance sheets don't have to worry about the distraction of debt.
•Money-making opportunities. Return on equity helps measure how well a company is finding opportunities to turn its resources into profitable business endeavors.
•Valuation. You can't afford to pay too much for even the best companies. By using normalized figures, you can see how a stock's simple earnings multiple fits into a longer-term context.
•Dividends. For tangible proof of profits, a check to shareholders every three months can't be beat. Companies with solid dividends and strong commitments to increasing payouts treat shareholders well.
With those factors in mind, let's take a closer look at Republic Services.
Since we looked at Republic Services last year, the company hasn't been able to gain back the point it lost from 2010 to 2011. Revenue has remained pretty much stagnant this year, and the stock has actually lost a little ground, falling about 5% in the past year.
Republic often gets lost in the shuffle of the waste industry, which Waste Management (NYSE: WM ) dominates. But the company really gained in importance after its 2008 merger with Allied Waste, which combined the No. 2 and No. 3 players in the industry under one roof. Although revenue hasn't moved much since the merger, cost savings from the merger have helped Republic's margins, which are more than a percent and a half higher than Waste Management's. It also no longer needs to worry about direct competition from Veolia Environment (NYSE: VE ) , which abandoned the U.S. trash collection business in a recent move to reorganize and refocus on its core markets.
Still, Republic can't just stand still in the face of ambitious competitors. For instance, Stericycle (Nasdaq: SRCL ) has focused on the medical-waste-disposal industry, a niche that should provide solid growth for years to come thanks to favorable demographic trends. With margins much higher than traditional waste collection, Stericycle's medical-waste emphasis poses an obstacle to keep Republic from expanding into the lucrative area.
Republic is taking steps to innovate and keep up with improving technology. Its partnership with Clean Energy Fuels (Nasdaq: CLNE ) involves using natural-gas-powered vehicles for waste hauling and other transportation needs. As long as natural gas stays cheap, this move should be a winner for Republic.
For Republic to improve, it needs to focus on finding new sources of revenue and on continuing to work its debt levels down. Slowly but surely, though, Republic has plenty of potential to become a perfect stock down the line.
Keep searching
No stock is a sure thing, but some stocks are a lot closer to perfect than others. By looking for the perfect stock, you'll go a long way toward improving your investing prowess and learning how to separate out the best investments from the rest.
Republic Services' partnership with Clean Energy Fuels is a smart move toward using alternative energy for lower costs and a cleaner environment. With plenty of potential to add its trucks to corporate fleets across the nation, Clean Energy Fuels looks like a promising investment. But is Clean Energy Fuels a buy right now? Read our new premium report on the stock and get the answers you need. Just click here to get started.
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Clean Harbors -- >>> Clean Harbors Signs Definitive Agreement to Acquire Safety-Kleen – A Leading Provider of Environmental and Recycling Services
$1.25 Billion Transaction Will Broaden Clean Harbors Waste Treatment Capabilities and Drive Significant Waste Volumes into Its Disposal Network; Company to Hold Conference Call Today at 9:00 a.m. ET
Press Release: Clean Harbors, Inc.
Mon, Oct 29, 2012
http://finance.yahoo.com/news/clean-harbors-signs-definitive-agreement-110000182.html
NORWELL, Mass.--(BUSINESS WIRE)--
Clean Harbors, Inc. (“Clean Harbors”) (CLH), the leading provider of environmental, energy and industrial services throughout North America,today announced it has signed a definitive agreement to acquire Safety-Kleen, Inc. (“Safety-Kleen”), the largest re-refiner and recycler of used oil in North America and a leading provider of parts cleaning and environmental services. Under the terms of the agreement, Clean Harbors will purchase Safety-Kleen in an all-cash transaction valued at $1.25 billion. The acquisition is subject to approval by U.S. and Canadian regulators, as well as other customary closing conditions. The transaction is expected to be completed by year-end.
Based on the current operating and anticipated future performance of Safety-Kleen, Clean Harbors expects the acquisition will be immediately accretive, excluding one-time fees and acquisition-related expenses. The Company has received a financing commitment from Goldman Sachs Bank USA, but is currently considering several financing options for the transaction that may include a combination of existing cash, debt and equity.
The transaction will enable Clean Harbors to:
• Penetrate the small quantity waste generator market
• Broaden its waste treatment capabilities to include re-refining waste oil and expanded solvent recycling capabilities
• Drive substantial increase in waste volumes into its existing waste disposal treatment network
• Capitalize on the growing demand for recycled products including re-refined oil
• Enhance its commitment to sustainability
• Leverage the combined sales forces to maximize cross-selling opportunities
• Add an immediately accretive business to accelerate growth
• Leverage operating efficiencies through the combined company
• Add to its strong cash flow generation
“This acquisition is a landmark achievement for Clean Harbors that we believe will build significant long-term value for our shareholders,” said Alan S. McKim, Chairman and Chief Executive Officer. “Safety-Kleen is a recognized leader in the environmental services field with a corporate heritage that dates back nearly 50 years with a strong service culture. We have the benefit of a long and positive relationship with Safety-Kleen as a result of our acquisition of its Chemical Services Division a decade ago. Safety-Kleen has been a large customer of our environmental services business. The addition of its entire organization aligns perfectly with our acquisition strategy of expanding our Environmental Services business in North America. Safety-Kleen is the largest collector of waste from the small quantity generator market and the leader in re-refining used oil in North America.”
“Adding Safety-Kleen’s re-refining and recycling capabilities to our current offerings will enhance the sustainability options available to our existing customers and significantly broaden the range of services we can offer customers of both companies,” McKim said. “Safety-Kleen services over 200,000 customer locations, and we envision substantial cross-selling opportunities with its extensive customer base. These Safety-Kleen customers will now have direct access to our industry-leading network of disposal facilities.”
Bob Craycraft, Safety-Kleen’s President and CEO, said, “We believe this transaction represents an opportunity to combine two truly dynamic organizations. Clean Harbors’ history of innovation and commitment to sustainability mirrors our philosophy of delivering our customers the latest in re-refining, recycling and hazardous waste management, as we continually upgrade the environmental services we offer. Safety-Kleen’s talented group of employees are joining an exceptional, well-managed company with a track record of success. At the same time, Safety-Kleen’s customers will benefit from access to Clean Harbors’ expansive suite of environmental, energy and industrial services.”
With more than 200 locations throughout North America, Safety-Kleen services commercial and industrial customers in the U.S., Canada and Puerto Rico. Safety-Kleen currently employs approximately 4,200 employees and operates a sizeable service fleet of more than 2,300 vehicles and 1,000 rail cars. Safety-Kleen’s portfolio of assets include the largest oil re-refinery in the world at its East Chicago, Indiana location and the largest re-refinery in Canada at its Breslau, Ontario location. Currently, the company collects approximately 200 million gallons of used oil annually, the majority of which it returns to the marketplace as reusable motor oil. In 2011, Safety-Kleen managed hazardous and non-hazardous waste volumes equivalent to approximately 680,000 55-gallon drums. Safety-Kleen generated revenues of $1.3 billion and adjusted EBITDA of $161 million in 2011.
McKim said, “Safety-Kleen’s professional approach toward compliance, health and safety excellence, and commitment to customer service is closely aligned with Clean Harbors’ devotion to those very same principles. Safety-Kleen is led by a first-class management team and we are excited to work together with Bob and his team to complete this merger. We are confident that working together we can capture substantial synergies between our two organizations and the significant upside potential of the combined company.”
“Looking ahead, our focus will be on gaining the necessary approvals, planning our integration and completing the acquisition by year-end. We appreciate the strength and intrinsic value of the Safety-Kleen brand. Therefore, we intend to maintain its brand going forward and operate its network of branch locations as a subsidiary. We look forward to welcoming Safety-Kleen’s employees into the Clean Harbors family. This transformative merger of two great companies will further reinforce our position as the premier provider of environmental, energy and industrial services in North America,” McKim concluded.
Davis, Malm & D'Agostine served as legal counsel to Clean Harbors. Credit Suisse served as lead financial advisor to Safety-Kleen. Morgan Stanley and Houlihan Lokey provided additional financial advisory support. Skadden, Arps, Slate, Meagher & Flom served as legal counsel to Safety-Kleen.
Third-Quarter Results
Clean Harbors will be announcing its third-quarter results on its regularly scheduled date, which as previously announced will be Wednesday, November 7. There will be no update on its quarterly financial results provided in conjunction with today’s announcement.
Conference Call Information
Management will hold a conference call today to discuss the Safety-Kleen transaction at 9:00 a.m. ET. Those who wish to listen to the webcast of the call and view the accompanying slides should visit the Investor Relations section of the Company’s website at www.cleanharbors.com. The live call also can be accessed by dialing 201.689.8881 or 877.709.8155 prior to the start of the call. If you are unable to listen to the live call, the webcast will be archived on the Company’s website.
About Safety-Kleen
Safety-Kleen is a leading North American used oil recycling and re-refining, parts cleaning and environmental solutions company, with approximately 4,200 employees serving more than 200,000 customer locations in the United States, Canada and Puerto Rico. Safety-Kleen provides a broad set of environmentally-responsible products and services that keep North American businesses in balance with the environment. Safety-Kleen is owned by a group of investors including Highland Capital Management, L.P. of Dallas, Texas, its largest investor. For more information about the company, please visit www.safety-kleen.com.
About Clean Harbors
Clean Harbors is the leading provider of environmental, energy and industrial services throughout North America. The Company serves more than 60,000 customers, including a majority of the Fortune 500 companies, thousands of smaller private entities and numerous federal, state, provincial and local governmental agencies.
Headquartered in Norwell, Massachusetts, Clean Harbors has more than 200 locations, including over 50 waste management facilities, throughout North America in 38 U.S. states, seven Canadian provinces, Mexico and Puerto Rico. For more information, visit www.cleanharbors.com.
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Rollins -- >>> Rollins Inc.’s Orkin unit has opened its first South American franchise in Santiago, Chile.
Jacques Couret
Atlanta Business Chronicle
August 7, 2012
http://www.bizjournals.com/atlanta/news/2012/08/07/orkin-now-open-in-chile.html?ana=yfcpc
Rollins Inc.’s Orkin unit has opened its first South American franchise in Santiago, Chile.
The new franchise also marks Atlanta-based Orkin’s 22nd international franchise.
Orkin Santiago Chile will offer commercial, residential and termite pest control services.
“We are proud to bring Orkin services to South America, and especially to Santiago, Chile, the country’s capital and largest city,” said Tom Luczynski, Orkin vice president of U.S. and international development and franchising. “There is a wide variety of climates throughout Chile, from one of the world’s driest deserts to subtropical climates. Each creates unique pest problems throughout the year, so customers will benefit from Orkin’s experience.”
Atlanta-based Rollins (NYSE: ROL) owns and operates Orkin, HomeTeam Pest Defense, Western Pest Services, PCO Services, The Industrial Fumigant Co., Waltham Services, Crane Pest Control and TruTech. It has franchises in the United States, Canada, Central America, the Caribbean, the Middle East, Asia, the Mediterranean, Europe and Africa.
Rollins recently reported its second-quarter profit was up about 7 percent to $33 million.
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GESI - Green Energy Solution Industries, Inc
Chart shows continued accumulation and positive CMF. W%R did not drop below -80, showing signs of uptrend.
http://stockcharts.com/h-sc/ui
News is pending any day. Take a look at GESI.
GESI Announces Major Development for $45 Million Funding of its Alternative Energy Project on StockTradersTalk.com Radio Show
http://ih.advfn.com/p.php?pid=nmona&article=53457782
A system for swing trading the market (see below), using the 5 day and 13 day exponential moving averages.
It's extremely simple - you buy when the 5 day EMA (blue line) crosses above the 13 day EMA (red line), and vice versa for selling/shorting. As long as the blue line is on top you stay long, and when the red line is on top you stay out or stay short.
It appears to work well, though if the market gets choppy you may have to get in and out a couple times before the trend is established. This looks a lot easier than trying to trade individual stocks and chart patterns -
10 day -
5 weeks -
3 months -
3 months -
Informatica -- >>> Informatica Slumps After Quarterly Sales Miss Estimates
By Kathleen Chaykowski - Jul 6, 2012 5:00 PM ET
http://www.bloomberg.com/news/2012-07-06/informatica-slumps-after-quarterly-sales-miss-estimates.html?cmpid=yhoo
Informatica Corp. (INFA) slumped the most in 11 years after the provider of data-integration software said weak demand in Europe caused an unexpected drop in quarterly sales and profit, sending down other software stocks.
The shares fell 28 percent to $31.39 at the close in New York, for the biggest daily decline since July 2001. The Redwood City, California-based company had risen 17 percent this year through yesterday.
Informatica released preliminary second-quarter results yesterday that trailed its own expectations, saying it didn’t adapt as rapidly as it should have to a downturn in demand, especially in Europe. Corporate customers reducing or deferring orders may also lead other software providers including Teradata (TDC) Corp., Citrix Systems Inc. (CTXS) and VMware Inc. (VMW) to reduce forecasts or miss earnings estimates, said Daud Khan, an analyst at Berenberg Bank.
“Companies are being far more cautious about spending,” Khan said in a telephone interview today. “Contracts have to be signed off by more people, which makes it difficult to get software deals done.”
Teradata, based in Dayton, Ohio, fell 10 percent to $65.01 at the close. MicroStrategy Inc. (MSTR) decreased 11 percent to $119.57, while QLIK Technologies Inc. (QLIK) fell a record 12 percent, to $17.97. QLIK has fallen 26 percent this year.
Citrix slid 7.6 percent to $77.45 and VMware fell 6.9 percent.
Software Slump
In Europe, Software AG (SOW) and SAP AG (SAP) also slumped. Software companies will probably lower full-year forecasts amid negative macro-economic data, Khan said in a research report.
Industry-wide trends were responsible for less than half of Informatica’s earnings miss, said Karl Keirstead, an analyst at BMO Capital Markets, in a research report.
“It would be a mistake to make a linear extrapolation to other software names,” said Keirstead, who rates the shares market perform.
Sales fell to about $188 million to $190 million in the period ended June 30, and earnings before certain items dropped to 27 cents to 28 cents a share, Informatica said in a statement yesterday after the markets closed. Analysts anticipated $217.4 million in revenue and 36 cents in earnings-per-share, according to predictions compiled by Bloomberg.
Informatica will report complete second-quarter results on July 26. In the second-quarter last year, the company posted revenue of $192.7 million on earnings-per-share of 33 cents, excluding items such as costs and tax benefits related to the amortization of acquired technology and intangible assets and stock compensation.
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Body Central -- >>> Body Central Is One Sale You'll Want To Check Out
Investopedia
June 25, 2012
Tickers in this Article » BODY, NWY, WTSLA, BEBE, RUE
http://www.investopedia.com/stock-analysis/2012/Body-Central-Is-One-Sale-Youll-Want-To-Check-Out-BODYNWYWTSLABEBERUE0625.aspx?partner=YahooSA#axzz1zTxW0bsd
It's time to go shopping. As of June 18, specialty retailer Body Central (Nasdaq:BODY) is down 65% year-to-date. Most of the damage to its stock price came May 4, dropping 48% after it announced its sales for the remainder of fiscal 2012 would be weak. Then on June 18 the company announced further reductions in its 2012 full-year guidance that sent its stock down another 49% to $8.20. In a little over a month it has shed $335 million in market cap. For all those adventurous risk takers out there, remember the old proverb: "It's always darkest before the dawn." Now get out there and buy, buy and buy some more!
Lack of Visibility
That's what the analysts call it when earnings guidance goes out the window because management has no idea when business is going to turn around. As recently as March 8, Body Central's management clearly had no inkling that business was about to fall off a cliff. Same-store sales were up 6.8% in the fourth quarter, which ended December 31,2011, and 11.3% for the entire 2011. Net revenues increased 20.4%, operating income increased 61.7% and net income per share increased over 100%. As CEO Allen Weinstein stated in its Q4 press release: "We closed 2011 with strong sales and earnings growth in the fourth quarter." You can't get more upbeat than that. So what happened between then and now?
Whatever the company bought for its summer inventory clearly isn't working and that's increased the rate of decline for same-store sales for the remainder of the year. In the first quarter, same-store sales declined 1.4% against a very strong 16.1% increase in the previous year. Yet, Body Central's net income stayed almost constant in terms of margin. Unfortunately, as a result of promotional selling, its earnings per share will be about 20% less than originally expected. Clearly, the margins couldn't be held with all the excess inventory. Analysts see blood in the water and are speculating that earnings could drop below $1.07 a share if this lack of sell-through keeps up. Weinstein suggests it will get better in the fourth quarter. If you do buy, be prepared for one more jolt before moving upward.
IPO Comparison
Canadian billionaire money manager Stephen Jarislowsky believes you can do better by buying a stock one or two years after its initial public offering. Body Central went public in October 2010 at $13 a share. Four months later it did a secondary offering at $16.50 a share. Private equity firm WestView Capital Partners sold approximately 61% of its shares in those two offerings and most likely unloaded the rest at prices well above $16.50. Twenty months in from its initial public offering, you are now able to do what Jarislowsky says you should do, and that's buy it for less.
In 2010, Body Central made $9.8 million on $243.4 million in revenue for a net margin of 4.0%. Fast-forward to 2012. Should it hit the lower end of its earnings and revenues guidance, BODY's net margin will be 140 basis points higher than in its IPO year despite possessing declining rather than increasing same-store sales. Further, it went public with a P/E of almost 18 and a P/S of 0.71 compared to a forward 2012 P/E of 7.8 and P/S of 0.43. At $1.07 in earnings in 2012, if you subtract out the $2.75 in cash per share, you're essentially paying $5 for every $1 in earnings. That's better than most of its similarly sized peers.
Bottom Line
Body Central will spend approximately $10 million opening 35 stores in 2012. With $44 million in cash, it better be buying back shares at this point regardless of whether the stock price falls some more. Although I'm not a fan of share repurchases - this begs for action.
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BodyCentral (BODY) looks like an interesting bottom play in the retail sector (women's apparel). The formerly high flying stock got clobbered twice after the CEO guided for lower revenues/earnings, but chart-wise it looks like it might be due for a bounce off the lows. They have $44 mil in cash and no debt.
Perusing their website, their fashion lines look like very high quality, but with the poor economy, apparently more women have been shopping at Target/Walmart lately -
Homebuilding sector (ITB) -
John Murphy recently discussed how homebuilders has been the strongest sector so far this year, and from the 10 year chart it looks like there's a lot of upside after being demolished from 2006-2009 (see below).
Also I was amazed to see that the glut of new homes on the market has been whittled way down (see 2nd chart below) -
Western Refining -- >>> A Worthy Cash-Rich Refiner
By Isac Simon
June 23, 2012
http://www.fool.com/investing/general/2012/06/23/a-worthy-cash-rich-refiner.aspx
Goldman Sachs (NYSE: GS ) has upgraded oil refining and marketing major Marathon Petroleum (NYSE: MPC ) from "neutral" to "buy." The investment bank's move, I believe, came at just the right time, with crude oil prices falling to an 18-month low. The internationally quoted Brent crude oil benchmark now trades at a little over $91 per barrel, while West Texas Intermediate (WTI) crude trades at around $80 a barrel.
Winds of change?
Marathon's exposure to the cheaper WTI crude sets it up perfectly to take advantage of the lower-priced benchmark. Falling crude oil prices should benefit refiners, especially for those that have refineries located in the Mid-Continent region. The once-coveted refining business had become pretty unfashionable in the past 12 months as gross margins contracted in the face of skyrocketing crude oil prices. The stage now looks set for a reversal of fortunes.
Advantage Marathon
Marathon's advantage, however, doesn't stem from the strategic locations of its refineries alone. A fundamentally solid financial position, backed by an investor-friendly management sets this company apart. In the first quarter, Marathon bought back shares worth $850 million. And a dividend yield of 2.3% is respectable at the least, if not outright fantastic. However, the best part is that Marathon has the ability to increase its dividends and repurchase more stock if required. Trailing-12-month free cash flow stands at a whopping $1.5 billion, an amazing feat for the refiner.
Strictly from an investor's standpoint, it'd be difficult for other refiners to compete with Marathon because of this huge advantage. Despite operating in similar regions, Western Refining (NYSE: WNR ) has been downgraded by Goldman to "neutral." Western's share-price performance hasn't been viewed as attractive as those of its peers.
Foolish bottom line
Right now, however, it's advantage Marathon. The only difficult part is for investors to believe that refiners will recover from their dismal showing in the past few months. Whatever the case, The Motley Fool will help you stay up to speed on the top news and analysis on Marathon Petroleum. All you need to do is add the company to your free personalized Watchlist.
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Trius Therapeutics (TSRX) - watch as the results for 2nd Phase 3 gets closer (antibiotic), expected in early 2013. 1st Phase 3 results were good. Company has over $90 mil in cash, no debt, and Roche is partner -
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=76908559
Adventrx -- >>> 2 Pharmaceutical Companies Trading Below Net Cash - Part II
May 30, 2012
by: Markus Aarnio
http://seekingalpha.com/article/625921-2-pharmaceutical-companies-trading-below-net-cash-part-ii?source=yahoo
I wrote part I of 2 Pharmaceutical Companies Trading Below Net Cash on May 21st. Since writing that article I have taken a new long position in Myrexis (MYRX). There has been more insider buying in Myrexis after my first article. Jason Aryeh was appointed a member of the Myrexis Board of Directors on October 19, 2011. Mr. Aryeh is the founder and managing general partner of JALAA Equities, LP, a private hedge fund focused on the biotechnology and specialty pharmaceutical sector. JALAA Equities has added 24,415 shares of Myrexis last week.
Adventrx Pharmaceuticals (ANX) is a biopharmaceutical company focused on developing proprietary product candidates. The company's lead product candidate is ANX-188, a rheologic, antithrombotic and cytoprotective agent that improves microvascular blood flow and has potential application in treating a wide range of diseases and conditions, such as complications arising from sickle cell disease. Adventrx is also developing ANX-514, a novel, detergent-free formulation of the chemotherapy drug docetaxel.
Sickle cell disease market and opportunity
More than $1.0 billion is spent annually in the U.S. to treat patients with sickle cell disease. Sickle cell disease is a genetic disorder characterized by the "sickling" of red blood cells, which normally are disc-shaped, deformable and move easily through the microvasculature carrying oxygen from the lungs to the rest of the body. Sickled, or crescent-shaped, red blood cells, on the other hand, are rigid and sticky and tend to adhere to each other and the vascular endothelium. Patients with sickle cell disease are known to experience severely painful episodes associated with the obstruction of small blood vessels by sickle-shaped red blood cells. These painful episodes are commonly known as acute crisis or vaso-occlusive crisis. Reduced blood flow to organs and bone marrow during vaso-occlusive crisis not only causes intense pain, but can result in tissue death, or necrosis. The frequency, severity and duration of these acute crises can vary considerably.
The company estimates that, in the U.S., sickle cell disease results in over 95,000 hospitalizations and, in addition, approximately 69,000 emergency department treat-and-release encounters each year. When a patient with sickle cell disease makes an institutional visit, vaso-occlusive crisis is the primary diagnosis in approximately 77% of hospital admissions and 64% of emergency room treat-and-release encounters. In addition, although the number is difficult to measure, the company estimates that the number of untreated sickle cell crisis events is substantial and in the hundreds of thousands in the U.S. each year. The company believes that, if ANX-188 is approved, as people with sickle cell disease are made aware of the new therapy, more people who suffer from acute crisis will seek treatment.
A number of other serious complications can arise from sickle cell disease, including acute chest syndrome, splenic sequestration, priapism, avascular necrosis, central nervous system abnormalities and the need for frequent blood transfusions. Acute chest syndrome is a leading cause of death in patients with sickle cell disease, and the company estimates that, in the U.S., there are nearly 10,000 episodes of acute chest syndrome associated with sickle cell disease every year. Up to half of patients diagnosed with acute chest syndrome are hospitalized initially for other reasons, most often vaso-occlusive crisis, and subsequently develop acute chest syndrome. The underlying cause of acute chest syndrome is believed to be pulmonary hypoxia and lung injury, which itself results from varied causes, including pulmonary infection, fat emboli and rib infarction, with the latter two being common complications of vaso-occlusive crisis. Acute chest syndrome typically is characterized by a pulmonary infiltrate evident on a chest radiograph in combination with clinical symptoms, such as fever, cough, chest pain, shortness of breath, wheezing, hypoxemia, increased leukocytosis or worsening anemia.
The company is not aware of any currently available therapeutic agents with demonstrated efficacy in shortening the duration or reducing the severity of an ongoing vaso-occlusive crisis or acute chest syndrome episode. Once a vaso-occlusive crisis occurs, treatment typically consists of hydration, oxygenation and analgesia, usually using narcotics. In addition, treatment for acute chest syndrome includes incentive spirometry, administration of antibiotics and bronchodilators and simple and exchange blood transfusion. By improving microvascular blood flow and reducing tissue ischemia, ANX-188 has the potential to reduce the incidence and severity and shorten the duration of vaso-occlusive crisis and/or acute chest syndrome and improve patient outcomes.
The company expects to initiate a phase 3 study on ANX-188 later this year.
I see at least three reasons to buy Adventrx currently
1. The company is trading below its net cash position
Adventrx had cash of $46 million and 47 million shares outstanding as of March 31st. This creates net cash of $0.97 per share.
2. Insiders have been buying shares lately
Director David A. Ramsay purchased 100,000 shares during month of May. Brian M. Culley purchased 34,500 shares during the month of March. Mr. Culley joined Adventrx in December 2004 and currently serves as chief executive officer, a position he has held since February 2010, and is also a member of board of directors.
3. The company has analyst price target of $1.46 per share
Edison Investment Research initiated coverage on Adventrx on May 25th 2012. At their investment report they wrote:
We value Adventrx at $80m, or $1.46 per share, based on a sum-of-the-parts DCF valuation, using a standard 12.5% discount rate. Our valuation is currently restricted to the potential use of ANX-188 in children in the U.S. market, based on market launch in 2016 and peak sales of $85m. An FDA agreement and clarity on the pivotal study design is crucial and could lead to a re-rating. Cash of $46m is sufficient for two years, assuming the trial starts by year end.
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MAP Pharma -- >>> Map Pharma : Shorts Should Beware
May 29, 2012
by: Shane Blackmon
http://seekingalpha.com/article/622211-map-pharma-shorts-should-beware?source=yahoo
MAP Pharmaceuticals (MAPP) received a Complete Response Letter (CRL) from the FDA on March 26th, 2012. The FDA cited, "that the Company address issues relating to chemistry, manufacturing and controls (CMC) and observations from a recent facility inspection of a third party manufacturer." These issues raised by the FDA seem to be minor, and MAPP will be meeting with the FDA to learn more on how they can resolve them. The FDA is not requiring any additional safety or efficacy studies.
On March 11th, I wrote an article entitled "MAP Pharma: Making Money From Migraines", where I wrote I expected approval. I was wrong; however, I brought up the fact that FDA might bring up red flags on minor issues. Since the rejection, MAPP's stock price has slid lower, from 17 to 12, as investors have yet to receive clarity of when Levadex could receive approval. Currently, expectations for approval range from 4Q 2012 to 1H 2013.
Investors continue their wait for MAPP's meeting with the FDA. We know MAPP requested a meeting with the FDA and this meeting was granted to discuss the CRL. By law, the FDA has 14 days to accept or reject the meeting with a company and another 60 days to have this meeting. By simple math, that means 74 days is the maximum timeline after the rejection for MAPP to know additional details about the rejection. That 74th day would fall on June 9th, 2012.
Short sellers have been pressing the stock lower, as they don't expect approval until 2013. They also expect that MAPP will need to raise more cash, which I feel is not necessary (more details later). These short sellers should be getting a little nervous as we finally receive clarity on when MAPP will resubmit for approval. If it ends up being late 2012, shorts will be scrambling to buy back their short positions.
Short sale data has shown that short interest in MAPP has grown from 1.8M shares before the rejection to more than 4.8M shares as of May 15th. That is more than 22 days of volume to cover and 19% of the current float is short. As June 9th approaches, I expect some short sellers to cover and longs to reenter positions.
Bears in MAPP continue to raise the concern that the company won't get approval until Q2 2013 and would need to issue shares to have enough capital to launch their drug. As of March 31st, MAPP had $79M in cash on their balance sheet. They've guided to operating cash expenses of $35-$37M for the rest of the year, leaving the company with $42-44M in cash at the end of 2012. At this same burn rate, MAPP's cash position would be down to roughly $15-20M by middle of 2013.
What shorts are missing is that Allergan (AGN) partnered with MAPP on sales through neurologists and pain specialists in the US and Canada only. Based on approval, MAPP will be receiving $97M more in payments based on regulatory milestones (i.e. approval). This would give them more than $110M in cash if they were to have worst case scenario of Q2 2013 approval from the FDA. Either way, I doubt MAPP would need to raise cash between now and approval.
Also, MAPP remains un-partnered for the remaining U.S. sales (not covered in AGN agreement) and all ex-US sales. Any type of partnership will bring in huge sums of cash, again thwarting the thesis of short sellers. Willing partners might are more likely to strike a deal with MAPP now that the FDA has pulled the worst case scenario of Levadex never reaching approval off the table.
At its current share price, MAPP remains an attractive acquisition candidate and investment. The share price could remain weak in the near term as the timeline of FDA approval is still unknown. I remain an advocate of selling $12.50 or $10 put options. I previously mentioned in my March 11th article that I was short puts, and anyone who pursued this strategy is still seeing solid profits despite MAPP's sagging price. In the end, the worst case scenario for MAPP was taken off the table by the FDA, and upon approval shares of MAPP will be over $20 for good.
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Some ideas -
Ideas from Frankiy's Moneymaker I-Hub board -
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=74522830
>>> There are just a few chinese stocks which I like longterm:
GPRC,ADY,LIWA,TBOW,OSN,DATE,RENN,DANG,TRIT
Other picks:
KITD (no brainer below $8)
HUSA (looks like bottom around @$3.55)
FFN , WEBM, GRVY, (sympathy Facebook IPO plays)
MCZ, THQI, GRVY ( game sector )
Bios
ZGNX (below $2.00 a bargain, NDA date by the end of April)
OPXA ( waiting for partnership news )
AEZS ( bottom play )
ALXA ( it has to chew through these $0.50 warrants before the big run imo)
I have a bigger list and the picks come and go but these are the ones which I am looking at closely.
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IceWeb -- >>> (IWEB.OB) Poised to Capitalize on Exploding Cloud Computing Industry
August 8, 2011
by admin
http://thestockmarketwatch.com/newsletters/2011/08/08/iweb-ob-poised-to-capitalize-on-exploding-cloud-computing-industry-2/
Penny Stock Pulse Newsletter
When it comes to communications, the internet is quite simply taking control.
Individuals of all ages use it as a main mode of communicating and businesses rely upon it both as an internal tool and a mean to work with customers – to an unparalleled level nowadays. Of course that is all relative to today.
Industry experts anticipate an ongoing rise in usage as cloud computing continues to become mainstream and its capacity continues to expand the breadth of its domain. Although still far from maturity, person-to-person interaction through cloud technology has gained a strong foothold, but what is next, device-to-device communication, is just in its infancy and ready to fuel expansive growth. Point-in-case, Google apps has recently launched its OS X Lion and Apple is in late stage development with iCloud and changes in the App Store.
Moreover, Microsofts latest creation in development, Windows 8, is centered around a consolidated ID for Windows Phone 7, Xbox and Skype. What this is going to do is shepherd-in the next generation of technological trend focused on connectivity between gadgets, PCs and post-PC devices as well as individuals and businesses. This paradigm shift will emphasize and rely upon wireless communication, cloud-based database storage and shared interfaces. It also could be a bellwether for the reality of the concept of logging-on to the web, rather than individual sites in the future.
The simple fact that the biggest names in the tech sector, including Microsoft, Google, Oracle, Hewlett-Packard and Amazon.com, are devoting extensive resources to try and take the lead in the burgeoning cloud computing market showcases the future of the industry. The high expectations of the industry have these companies scrambling to properly align themselves to take the biggest possible chunk of market share. And that market is healthy. Global sales for cloud services in 2010 leapt forward by about 20 percent over 2009; rising to roughly $70 billion (up from $58 billion). Research firm Gartner tags 2012 sales estimates at a whopping $102 billion.
Smaller, cloud-based companies are already being acquired by the larger counterparts looking to beef-up their cloud capabilities while it is still on the ground floor. No one is displaying initiatives for the future more than Hewlett-Packard. The company started demonstrating their belief in the value of cloud technologies in 2007 by snagging data center automation startup Ospware for $1.6 billion (16 times the total 2006 revenue of Ospware). In 2010, H-P gobbled-up network gear maker 3Com Corp. for $2.7 billion. That was followed by a cash acquisition of security software maker ArcSight, Inc. for $1.5 billion. Smart move as keeping your version of the cloud secure is mandatory. Further, H-P continued its quest by outbidding Dell last year to acquire data storage company 3Par for $2.4 billion. Safe to say that Hewlett-Packard is getting its ducks in a row and many other industry leaders will be following with acquisitions as it is far either to swallow another company than try and develop all of the technology internally.
A company that should benefit from the exponential growth that is on tap for cloud computing is Sterling, Virginia-based IceWEB, Inc. (OTCBB:IWEB) Headquartered just outside of Washington, D.C., IceWEB is quickly establishing itself as an industry leader as a manufacturer and marketer of Unified Data Storage and building blocks for cloud storage networks. As a company, IceWEB is not new; it was incorporated nearly two decades ago and established its name and reputation in the federal computing space with a focus on unstructured geospatial data, as well as managing and storing block data as an ASP in the enterprise and federal space. Branding itself and establishing a market footprint, IceWEB received many accolades including being twice named Inc.
Magazines Inc. 500 Fastest Growing private US corporations and as a member of the Deloitte & Touche Technology Fast 500 North American public or private technology companies.
Expanding upon early successes, IceWEB management developed and expanded on the rich storage management features to bring to market a versatile, all-inclusive storage system aggressively priced for the commercial mid-market space. The executives behind this growth have a track record of highly relevant experience and accomplishments. CEO and Board Chairman John R. Signorello was the founder and man at the helm of STMS (Solutions That Make Sense), a private technology firm specialized in computer networks, systems integration and information technology, that was ranked as the 17th fastest growing technology company in America by The National Technology Council The Fast Five Hundred in 1996. In what is a common practice in the technology industry, SMTS was acquired by Steelcloud (Nasdaq:SCLD) in 1997. Equally important for a public company, Mr.
Signorello has a background as a Director for a publicly traded Internet Venture Fund. Other executives and Board Members bring more than a centurys worth of top-level experience obtained in a wide array of industries and through large corporations, including SteelCloud.
IceWEB leverages its experience to partner with the largest names in the tech industry. Their list of technology partner list reads like a Whos Who in Tech Success and includes such names as Microsoft, Intel, Sun Microsystems, Oracle, Citrix, Cisco Systems and Seagate Technologies, to name a few.
A look at recent contracts and announcements reveals a company that is gaining steam within the industry as news of new contracts flow in a steady stream.
Showcasing their prowess and brand name within the government sector, their premier partner, VideoBank, received another Department of Defense contract as released in June. Per the agreement, VideoBank is slated integrate two 48 TB IceWEB Fibre Channel Arrays into their advanced Digital Asset Management system which will be deployed in flight cases to the Middle East for remote sensor data capture. This announcement came on the heels of an earlier order from a Department of Defense agency for a 576 terabyte IceWEB storage system.
IceWEB has recently partnered with Promark Technology as IceWEB launched its latest 3000HP (High Performance) Unified Storage Platform. This new partnership is reaping immediate rewards as Promark already has received a contract for the IceWEB unified storage platform to be deployed in a cloud computing environment. Commenting on its industry position, CEO Signorello stated, “IceWEB`s growth strategy is clearly targeted on cloud computing, virtualization and unified data storage. Not only do we have the right products at the right time, we have forged the right partnerships — VMware, and Citrix — to serve a giant market that is just starting to take off.
Aiming to capitalize on their synergies, Promark and IceWEB are presently moving forward with a merger which should instantly bolster IceWEB value.
Investors always look at numbers in their due diligence and IceWEB meets the mark in that category as well. IceWEB announced in late May that its digital footprint is quickly approaching $10,000,000 and estimates that deferred maintenance revenue will be approximately 15% of revenue over the next 12 months to maintain, upgrade and support systems with expired warranties. It is interesting to note that four new contracts have already been released since those estimates were disclosed which should pad those totals.
Traders that implement a technical approach will like what IceWEB has to offer. The share value has been steadily uptrending for more than a year and is currently sitting on a trendline and right in the area of a technical support level. There will be some minor resistance at 20 cents, but not again until a more than 50 percent climb to 30 cents, which will serve as a breakout point with a clear view until near the 52-week high of 47 cents.
IceWEB is presently sporting a market capitalization of a paltry $27 million.
Given the recent $10 million announcement and subsequent new orders, this can make an investor raise an eyebrow. If market cap is based upon potential for future earnings and typically registers a multiple of four or five times present earnings, IceWEB could certainly be perceived as undervalued. It is for these reasons that we have performed our due diligence on IceWEB, Inc.
Read more: http://thestockmarketwatch.com/newsletters/2011/08/08/iweb-ob-poised-to-capitalize-on-exploding-cloud-computing-industry-2/#ixzz1rSWr0kcT
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Galena Biopharma (GALE) -
http://stockpickr.com/5-stocks-setting-break-out.html-19
>>> One more stock that’s already starting to trigger a big breakout trade today is Galena Biopharma (GALE), a biotechnology company focused on discovering, developing and commercializing therapies addressing unmet medical needs using RNAi-targeted and immunotherapy technologies. This yet another hot stock in 2012, with shares up over a whopping 196%.
If you look at the chart for Galena Biopharma, you’ll notice that this stock hit a recent low at 36 cents per share back in December. Since hitting that low, the stock has soared to its current price of around $1.40 a share. During that monster uptrend, shares of Galena Biopharma have consistently made higher lows and higher highs, which is bullish price action. The stock has also seen strong upside volume trends, which is bullish technical action. Now GALE is starting to trigger a big breakout trade today on strong volume.
Market players should continue to look for long-biased trades in GALE as long as the stock is trending near or above its key breakout levels of $1.39 to $1.48 a share. At last check, this stock has hit a daily high of $1.48 and volume is already over 2.8 million shares, which is well above its three-month average action of 818,074 shares. If this stock can manage to close near its daily highs and above those breakout levels, then it has a great chance to re-test its next major overhead resistance levels at $1.65 to $2.14 a share or possibly much higher very quickly.
This is another heavily shorted stock, since the current short interest as a percentage of the float for GALE stands at 11%. The bears have also been increasing their short positions from the last reporting period by 52.6%, or by about 1.52 million shares. Look for a monster short-squeeze to kick off if GALE can hold the breakout.
I also featured Galena recently in "5 Stocks Under $5 Making Big Moves." <<<
Kodiak Oil & Gas
http://stockpickr.com/5-stocks-set-soar-bullish-earnings.html-16
>>> Another potential earnings short-squeeze trade is independent energy player Kodiak Oil & Gas (KOG), which is set to report results on Tuesday after the market close. This company is focused on the exploration, exploitation, acquisition and production of crude oil and natural gas in the U.S. Wall Street analysts, on average, expect Kodiak Oil & Gas to report revenues of $59.86 million on earnings of 9 cents per share.
This is another strong equity that’s trading within range of a big breakout post-earnings. Shares of Kodiak Oil & gas closed Monday at $10.52 a share, which is just 40 cents off its 52-week high of $10.90. The current short interest as a percentage of the float for Kodiak Oil & Gas is pretty high at 11.4%. That means that out of the 199.18 million shares in the tradable float, 28.06 million are sold short by the bears.
From a technical perspective triggering a big breakout, KOG is currently trading above its 50-day and 200-day moving averages, which is bullish. This stock recently found some big buying support at around $8.77 to $8.79 a share. Since buyers stepped in at those levels, the stock has ripped higher towards its current price of $10.50.
If you’re bullish on KOG, I would look for long biased trades after its report if the stock breaks out above $10.90 a share (or its daily high on Tuesday if it’s greater) with volume. Look for volume that’s tracking in close to or above its three-month average action of 4.2 million shares. If we get that high-volume breakout, then I would look for a sharp spike higher considerably after earnings.
I would simply avoid KOG or look for short biased trades if this stock fails to breakout after earnings and then drops below $10 a share with heavy volume. If we get that action, then I would target a drop back towards the 50-day moving average of $9.45 a share, or possibly much lower if the bears whack this down post-earnings.
I also featured KOG recently in "8 Stocks Under $10 Moving Higher
<<<
Here is a simple trading system for the overall market using the Full Stochastics and MACD Histogram indicators -
Criteria for a buy signal -
1) The Full Sto indicator has to fall to or below 20.
2) Then wait for the black Full Sto line to touch its red signal line.
3) Then watch for the first day that the blue columns of the MACD Histogram either stop getting longer, or start getting smaller. That is your buy signal.
Based on that day's intraday price action, you may be able to tell that the blue MACD column is going to be shorter that day, and thus not have to wait for the close for your buy signal. Using the MACD Histo indicator as the final buy criteria will prevent getting into a falling market too early (see early Aug 2011, where if using only Full Sto signals, you would buy in way too early).
A sell signal is the reverse of the above, with the Full Sto having to be at or above 80 -
A board to discuss Services Sector stocks -
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Cintas (CTAS) - Uniforms, maintenance services (39 Bil) ------------------------------------------- 1.0%
Copart (CPRT) - Online auctions, vehicles (32 Bil) ---------------------------------------------------- 0%
Ecolab (ECL) - Cleaning and sanitizing products and programs (46 Bil) (Gates) ------------- 1.3%
Exponent (EXPO) - Engineering and scientific consulting services (5 Bil) ---------------------- 1.0%
Republic Services (RSG) - Waste management services, recycling (38 Bil) ------------------ 1.5%
Rollins (ROL) - Pest and termite control services (18 Bil) ------------------------------------------- 1.4%
Service Corp Intl (SCI) - Deathcare services and products (10 Bil) ------------------------------ 1.5%
Waste Connections (WCN) - Waste services (32 Bil) ------------------------------------------------ 0.8%
Waste Management (WM) - Waste services (60 Bil) ------------------------------------------------- 1.8%
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SERVICES -
Accenture (ACN) - Business management services, Ireland (50 Bil) ---------------------- 2.4%
Alliance Data Services (ADS) - Marketing and loyalty solutions (16 Bil) ----------------- 0%
Amerco (UHAL) - Moving and storage (6 Bil) ---------------------------------------------------- 0%
Automatic Data Processing (ADP) - Business outsourcing solutions (42 Bil) ---------- 2.3%
Bright Horizons Family Solutions (BFAM) - Child care services (3.8 Bil) -------------- 0%
Cintas (CTAS) - Rental uniforms, first aid, safety, fire protection svcs (9.7 Bil) --------- 1.0%
Exponent (EXPO) - Engineering and scientific consulting services (1 Bil) ----------------1.4%
Gartner (IT) - Independent IT research and analysis (6 Bil) ---------------------------------- 0%
IHS (IHS) - Information and analysis to diverse industries (8 Bil) ---------------------------- 0%
Maximus (MMS) - Business services to govt health + human svs agencies (4.1 Bil) -- 0.3%
Rollins (ROL) - Pest control services (4 Bil) ------------------------------------------------------ 1.4%
United Parcel Service (UPS) - Package delivery services (86 Bil) ------------------------- 3.0%
SERVICES - STAFFING -
On Asssignment (ASGN) - Diversified professional staffing (1.6 Bil) -----------------------
Team Health Holdings (TMH) - Healthcare staffing and administrative svcs (4 Bil) ----
SERVICES - WASTE MANAGEMENT -
Stericycle (SRCL) - Medical waste (10 Bil) ----------------------------------------------------- 0%
US Ecology (ECOL) - Radioactive and hazardous waste disposal, recycling (1 Bil) - 1.6%
Waste Connections (WCN) - Waste services (6 Bil) ----------------------------------------- 1.0%
Waste Management (WM) - Waste services (25 Bil) ----------------------------------------- 2.8%
VanEck Vectors Environmental Svcs ETF (EVX)(Exp-0.55%,Assets-37 mil,Yld-0.44%)
SERVICES - AUTOMOTIVE -
AutoNation (AN) - New and used automotive sales and parts (7 Bil) --------------------- 0%
CarMax (KMX) - Used car dealerships & financing (13 Bil) ---------------------------------- 0%
Copart (CPRT) - Online auctions, vehicles (4 Bil) ---------------------------------------------- 0%
SERVICES - FINANCIAL -
Cardtronics (CATM) - ATMs, automated financial services (2 Bil) ------------------------- 0%
Equifax (EFX) - Financial services (12 Bil) ------------------------------------------------------- 1.2%
Factset Research Systems (FDS) - Finance / investment data (5 Bil) ------------------- 1.3%
Fidelity National Info Services (FIS) - Banking and payment technol svcs (16 Bil) -- 1.7%
Fiserv (FISV) - Financial services technology solutions (19 Bil) ----------------------------- 0%
Portfolio Recovery (PRAA) - Receivables collection services (3 Bil) --------------------- 0%
Wire Card (WRCDF) - Outsourcing electronic payment transactions, Germany (5 bil) 0.46%
SERVICES - HEALTHCARE -
Acadia Healthcare (ACHC) - Behavioral healthcare services (5 Bil) ------------------------ 0%
Addus Homecare (ADUS) - Services for elderly and disabled (248 mil) ------------------- 0%
Capital Senior Living (CSU) - Senior living communities (660 mil) ------------------------- 0%
Cerner (CERN) - Health care information technology (25 Bil) --------------------------------- 0%
Chemed (CHE) - Hospice and palliative health care svs, Roto Rooter (1.7 Bil) ---------- 0.9%
DaVita (DVA) - Kidney dialysis services (18 Bil) --------------------------------------------------- 0%
Ensign Group (ENSG) - Skilled nursing and rehabilitative services (746 mil) ------------ 0.85%
Healthcare Services (HCSG) - Laundry + maint to h.care facil, dietary svcs (1.9 Bil) -- 2.3%
Mednax (MD) - Neonatal and pediatric medicine, anesthesiology (8 Bil) ------------------- 0%
SERVICES - TECHNOLOGY -
Amdocs (DOX) - Business software and svcs for communications (Israel) (8 Bil) ------ 1.3%
CGI Services (GIB) - Diverse IT and business services (Canada) (14 Bil) --------------- 0%
Cognizant Technology (CTSH) - IT outsourcing (38 Bil) ------------------------------------- 0%
EPAM Systems (EPAM) - Software engineering, IT consulting (3 Bil) -------------------- 0%
J2 Global (JCOM) - Internet services (3 Bil) ----------------------------------------------------- 1.7%
NetEase (NTES) - Internet services, China (11 Bil) -------------------------------------------- 1.6%
Sapiens Intl (SPNS) - Software for insurance industry (Israel) (392 mil) ------------------ 0%
Scientific Applications Intl (SAIC) - IT svcs for govt + military (1.9 Bil) ----------------- 3.0%
ServiceNow (NOW) - Service management software (12 Bil) ------------------------------- 0%
Syntel (SYNT) - IT services and consulting (4 Bil) ---------------------------------------------- 0%
Tyler Technologies (TYL) - IT services for the public sector (4 Bil) ----------------------- 0%
Virtusa (VRTU) - IT services (1 Bil) ----------------------------------------------------------------- 0%
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OTHER -
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Clean Harbors (CLH) - Hazardous materials management services (3 Bil)
Outerwall (OUTR) - Self service coin exchange and video kiosks (1.6 Bil)
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Name | Symbol | % Assets |
---|---|---|
Waste Management Inc | WM | 10.84% |
Waste Connections Inc | WCN.TO | 10.73% |
Republic Services Inc Class A | RSG | 10.69% |
Steris PLC | STE | 10.00% |
Casella Waste Systems Inc Class A | CWST | 3.57% |
Evoqua Water Technologies Corp | AQUA | 3.19% |
ABM Industries Inc | ABM | 3.17% |
Advanced Disposal Services Inc | ADSW | 3.14% |
Covanta Holding Corp | CVA | 3.12% |
Tetra Tech Inc | TTEK | 3.12% |
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