Their business is completely garbage – and their stock can climb as a result.
Garbage truck companies may soon be all the rage – thanks to a new report rounding up Wall Street advising investors not to ignore the waste management sector when industries may be exploring what the Coronav Vaccination Can benefit from the economic rebound triggered by.
“Waste is a short-lived reunion game,” Jefferies analyst Hamza Mazari said in the report, “Q1 Waste Preview: The Best Time to Own Garbage” in recent history.
The report predicts that garbage collection companies like waste management, republic service and waste connections are going to get a big boost as people start spending money to go out and have fun again. It added that personal spending on goods other than food and energy would increase by 7.1 percent this year.
And this is very good news for the garbage industry, which is “highly correlated” to such spending.
The report states, “We remain positive at the garbage place … one of the best environments to come out of COVID-19.” In an interview with The Post, Mazari further explained his thesis by saying that garbage was removed from people’s homes last year amid nationwide locks.
But it did nothing to help the major waste collection companies because they are paid a flat rate by municipalities for lifting and recycling residential trash.
These companies said that when people start disposing of garbage in theaters and baseball stadiums, they will back out of the results of their COVID-19 because they pay to pick up trash based on location frequency and container size.
He said he predicts total waste volume to grow by 4 percent this year – or twice the average annual growth rate of 2 percent – as people resume ventures for work, recreation and travel.
For example, waste management would benefit if baseball fans start returning to the games again because it accounts for 60 percent of the nation’s baseball stadiums.
Shares of the country’s three major waste collection companies – Waste Management, Republic Services and Waste Connection – are already in double digits this year, following last year’s single-digit gains.
And Mazari sees “room to grow more.”
“Consumption in 2021 will be in double digits compared to 2020,” Mazari said.
“Now they will go out and spend on entertainment, restaurants, travel and rest.”