Q: I was going to buy this last summer around $50 but I was scared off by a barrage vandalism,threats,fires and threats to CEO and another board member.
Looking back now with the stock at $65 and a recent divesture of waste division do you see much upside for this stock price and also do you think my concerns were paranoia or justified. Thanks
Looking back now with the stock at $65 and a recent divesture of waste division do you see much upside for this stock price and also do you think my concerns were paranoia or justified. Thanks
5i Research Answer:
We think the deal looks interesting and sets the company up for another leg of growth. Based on EV/EBITDA, GFL shares look in-line with peers at 13.5X and the company is a mid-single digit grower on the top-line. The Environmental Services sale looks like a well thought out deal with the company getting some cash to clean up the balance sheet and also some dry powder with which to do deals. They are also retaining an interest in the Environmental business to keep some upside there as well. The debt repayment will decrease interest costs by $200 mln.
Recent newsflow has not been the greatest and is a risk to consider but the company itself continues to operate and has been public now with an operating history of just about five years.