By Peet Serfontein & Zimele Mbanjwa
Waste Management Inc. is the largest waste disposal and environmental services company in the United States (US), providing comprehensive waste management solutions, including collection, recycling, landfill management, and environmental consulting. The group provides services throughout the US and Canada where it owns 263 landfill sites, and manages 332 transfer stations that consolidate, compact, and transport waste efficiently and economically.
Through its subsidiaries, the group is also a developer, operator, and owner of landfill gas-to-energy facilities in the US and Canada that produce renewable electricity and renewable natural gas, which provides a significant source of fuel that it allocates to its natural gas fleet.
Technically, the stock recently triggered a "buy" signal based on the Bollinger Bands theory (see the insert on the main chart). A breakback above the lower band suggests strong upward momentum. This is particularly significant on a weekly chart as it reflects a longer-term trend shift. This often attracts more investors who see the breakout as a confirmation of a bullish trend and can lead to further buying pressure. The stock is also in the Markup phase of the Wyckoff Market Cycle. This phase occurs when demand outweighs supply, again leading to rising prices as more investors seek to buy in anticipation of higher returns.
The stock is trading above its 200-day simple moving average (SMA) of $203.28, which supports a bullish outlook.
Fading downside price momentum according to the MACD indicator, as well as the recent upward trajectory of the On-balance volume (OBV) indicator, supports our bullish stance.
Share Information
| Share Code | WM |
|---|---|
| Industry | Commercial & Professional Services |
| Market Capital (USD) | 83.91 billion |
| One Year Total Return | 37.86% |
| Return Year-to-Date | 18.02% |
| Current Price (USD) | 209.09 |
| 52 Week High (USD) | 225.00 |
| 52 Week Low (USD) | 152.09 |
| Financial Year End | December |
| The stock price has trended positively, with strong growth over the previous 12 months. |
Consensus expectations
(Bloomberg)
| FY23 | FY24E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 6.19 | 7.25 | 8.03 | 9.00 |
| Growth (%) | 17.16 | 10.74 | 12.04 | |
| Dividend Per Share (USD) | 2.80 | 3.01 | 3.18 | 3.35 |
| Growth (%) | 7.32 | 5.96 | 5.06 | |
| Forward PE (times) | 28.83 | 26.04 | 23.24 | |
| Forward Dividend Yield (%) | 1.44 | 1.52 | 1.60 | |
| Earnings growth is expected to be resilient over the medium term. | ||||
Buy/Sell Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position | ETN US - Buy (Continue to hold) | RJF US - Buy (Continue to hold) | FAST US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 297.69 | 117.58 | 66.90 |
| Current | 326.96 | 124.70 | 70.71 |
| Movement | +9.8% | +6.1% | +5.7% |
|
A "buy" signal based on a Bollinger Band strategy remains of interest. Remains above its 200-day SMA and emerging upside price momentum supports the trade.
Our profit target remains at $352, with a trailing stop-loss at $305.30. Exit the trade by 13 December 2024. |
A broadening top pattern remains attractive. The stock remains above its 200-day SMA, and upside price momentum is supportive.
Our profit target is $132, with a trailing stop-loss at $118.50. Exit the trade by 6 December 2024. |
A developing rising wedge pattern remains of interest. Remains above its 200-day SMA. Upside price momentum supports the strategy.
Our profit target is $75, with a trailing stop-loss of $67.30. Exit trade by 23 October 2024. |
| Share Name and position | LRCX US - Buy (Continue to hold) | SYY US - Buy (Continue to hold) | DPZ US - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 79.11 | 75.19 | 416.77 |
| Current | 81.11 | 76.14 | 420.89 |
| Movement | +2.5% | +1.3% | +1.0% |
|
A price at the start of Wave 5 of the Elliott Wave price analysis remains of interest. Remains below its 200-day simple moving average. Fading downside price momentum supports the trade strategy.
Our profit target is $97.30 with a trailing stop-loss at $73.20. Exit the trade by 27 December 2024. |
A developing symmetrical triangle pattern remains of interest. The stock is testing its 200-day SMA. Fading upside momentum is a concern.
Our profit target is $84 with a trailing stop-loss at $72.80. Exit the trade by 6 November 2024. |
A price bouncing off its 200-week simple moving average (SMA) remains of interest. Fading downside price momentum supports the trade strategy.
Our profit target is $482 with a trailing stop-loss at $392.30. Exit the trade by 20 November 2024. |
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