Q: Thoughts on WCN for a new investment and/or continuing to hold ? Been drifting lower. How was their last earnings report in guidance ? Thank you.
5i Research Answer:
WCN is doing just fine as a business. It is one of the best operators in the waste management industry. In fact, the industry has demonstrated a high degree of recurring revenue and pricing power over the years. In terms of guidance, in Q3-2024, WCN actually raised its full-year 2024 outlook, increasing both the revenue and EBITDA guidance from their original outlook. WCN continues to execute well.
We think it can continue to perform well over time. The reason for the recent pressure is mainly because there has been a shift of funds from value/stable stocks towards high-growth names. We think as long as investors own great companies at decent valuations, investors should not pay attention to the normal volatility of the market.