Should we buy meridian shares

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Waste industry companies have historically offered both value and growth opportunities. For well-managed companies, strategically exploited opportunities can deliver exceptional results. By looking at specific stocks in the sector, it is glaringly obvious that even those businesses that are performing at high levels, not all are appraised equally, with inconsistent valuation metrics recorded across the board.

WCN , is lined to determine which stock may offer the greatest value opportunity at current levels. The question begs, why? So, before I get beat up by the large-cap hawks, let me substantiate that comment.

Active investors should already be well aware of the price inefficiencies in the marketplace.

They live it on a daily basis. Just like other sectors in the market, these inequalities are glowingly apparent in the waste industry, with no shortage of crowd favorites emerging among the listed companies. But playing crowd favorites over substance can be costly, and in the case of ignoring Meridian, it may present a wasted opportunity for making money.

Meridian currently serves over , residential, commercial, industrial and government customers, supported by a fleet of over trucks that operate throughout the Missouri and Virginia markets. In addition to the capital assets named, Meridian owns transfer stations, three solid waste landfills and a recycling facility that is also contractually enhanced by municipal and subscription customers.

Thus, it is a head scratcher when comparing the valuation metrics, with Meridian given a revenue multiple of only 1. For comparison purposes, Waste Management has a current revenue multiple of 3 times and an EBITDA multiple of Waste Connections is given a revenue multiple of 6.

For those keeping score, the average multiple for the entire industry is 3. Clearly, Meridian's growth is going unnoticed at a time when it should be receiving greater attention, not less.

The case for Meridian is that while competitors are maturing, it is in growth mode, fortified with access to sizable amounts of capital.

Meridian shares are not for all | omenejomy.web.fc2.com

The growth strategy keeps Meridian in active pursuit of accretive acquisitions, several of which the company has already publicly discussed. Management has guided toward additional tuck-in acquisitions and geographical expansion roll-ups to have a national footprint and deliver improved profitability.

The growth initiatives have proven successful in driving service revenue to a base of over , residential customers and over 5, commercial customers, with additional traction expected through acquisition and organic growth.

Taking into account Meridian is in growth mode, has non-dilutive capital at hand and is successfully capitalizing on its strategic mission, it may only be a short matter of time before the stock is rightfully and efficiently valued, bringing near-term opportunities to investors that are attracted to growth-oriented stocks. As a value pick, Meridian is an emerging and potentially powerful waste service provider and, if properly appreciated, represents a potential triple-digit percentage gain from current levels.

Waste Management appears to be a good company to work for, voted the Most Ethical Company by the Ethisphere Institute.

But is its code of ethics worthy of such high valuations? Waste Management has a revenue multiple of roughly 3 times and an EBITDA multiple of approximately During its most recent quarter, the company recorded revenue growth of 6. While the numbers are strong, do they correspond to making an investment into Waste Management over Meridian?

I think not, unless you like to ride on large, fully-loaded steamships instead of speed boats. In other words, investing in Waste Management may offer a slow ride, susceptible to market dynamics and uncertain trends.

Unlike the double-digit momentum recorded at Meridian, Waste Management's internal revenue growth from yield for collection and disposal operations was 2.

On the solid waste side, internal revenue growth from volume was 1. During fiscal , the company's traditional solid waste internal revenue growth from volume was 1. Total company internal revenue growth from volume, which includes recycling and renewable energy, was 2.

Total company volume was 1. Internal revenue growth from yield on the collection and disposal business is expected to be approximately 2.

Internal revenue growth from volume is expected to be between 1. Furthermore, since the start of the year, shares of the Waste Management have gained 2.

So the behemoth looks healthy, and that bodes well for the smaller players as well. For the "80 something," dividend-minded investors, the 2. While Waste Management is worthy of investment, is it a better investment consideration over Meridian at these levels? If you are an investor that likes to watch paint dry, yes.

If you agree that high growth will ultimately define a share price, then no. The stock has a revenue multiple of roughly 6.

Each of these valuations is almost triple that of Meridian. Even with encouraging guidance given for , with small percentage increases in both revenue and net income expected, the share price may be fully valued at current levels. This prognostication is not without trepidation because Waste Connections did perform well.

From the company filing for the year ended Dec. Waste Connections remains well positioned to continue to capitalize on industry opportunities with a strong balance sheet and proven management.

In comparison, once again I see Waste Connections as approaching full value for , and Meridian being the stock to continue to ride the wave higher. No disrespect to Waste Connections, it is doing well.

My grandfather loves them too. The solid news out of both Waste Management and Waste Connections bodes well for Meridian in Industry strength trickles down, and with Meridian extremely well positioned and having the financing in place to capitalize on additional acquisition and revenue generating strategies, the potential for share price appreciation is far more likely than at Waste Management and Waste Connections.

Meridian is already strong. To be fair, it is the valuation metrics that need to be brought closer toward industry averages, and the likelihood the company will eventually be a beneficiary of such noble praise is likely.

It is just a matter of time before the market catches up and corrects its pricing error. While a strong case can be made for investment into any of the three waste stocks covered, when looking at which stock offers the most compelling near-term case for share price appreciation, Meridian rises above the others.

If not because it too is posting impressive results, then because it is rightfully worthy of higher multiples. I do not own shares in any company mentioned herein. Nor do I have plans to open any positions within the next 72 hours. Your selection and notes will be stored in your portfolio.

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Should you buy Meridian Energy? | Motley Fool Australia

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Better Buy: Meridian Waste, Waste Management or Waste Connections? - omenejomy.web.fc2.com

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Click here to check it out. Waste Management Waste Management appears to be a good company to work for, voted the Most Ethical Company by the Ethisphere Institute.

A healthy industry supports all The solid news out of both Waste Management and Waste Connections bodes well for Meridian in Subscribe via Email Subscribe RSS. Please leave your comment: More than , people have already joined GuruFocus to track the stocks they follow and exchange investment ideas. Buys Banc of California Inc, Flagstar Bancorp Inc, Wintrust Financial Corp, Sells Regions Financial Corp, Astoria Financial Corporation, Citizens Financial Group Inc by insider.

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