6) Clean Harbors, Inc. (NYSE:CLH)
Net Income on TTM Basis: $392.8 million
5-Year Net Income CAGR: 35.90%
Number of Hedge Fund Holders: 37
Clean Harbors, Inc. (NYSE:CLH) offers environmental and industrial services in the US and internationally.
Market experts believe that Clean Harbors, Inc. (NYSE:CLH) continues to capitalize on the increasing demand for waste management and recycling. The company has a strong project pipeline, which is expected to continue into 2025. Wall Street believes that the Kimball and Baltimore expansions and recent mergers and acquisitions, which include HEPACO, should provide self-driven growth. Clean Harbors, Inc. (NYSE:CLH)’s recent expansion of the borrowing capacity with a $600 million credit facility exhibits a commitment to maintaining a strong and stable financial foundation.
Moreover, the experts remain quite optimistic about the company’s acquisition of HEPACO. The acquisition will be highly synergistic with healthy margin improvement potential. Clean Harbors, Inc. (NYSE:CLH) expects to achieve its targeted cost synergies in areas like subcontracting, branch network, asset rentals, transportation and procurement.
In H2 2024, Clean Harbors, Inc. (NYSE:CLH) is expected to witness healthy demand and momentum in its core disposal, recycling, and service businesses. In Environmental Services, its record backlog, healthy project pipeline, and demand for the broad suite of services place it well for continued growth.
Needham & Company LLC upped its price target from $235.00 to $274.00, giving a “Buy” rating on 1st August. Merion Road Capital, an investment advisor, released its Q1 2024 investor letter. Here is what the fund said:
“During the quarter I uncharacteristically built a position from nothing into our top holding. Clean Harbors, Inc. (NYSE:CLH) is the largest US hazardous waste management company. Before digging into CLH I would like to diverge with a bit of personal history. In my early 20’s I worked at Macquarie Bank where our team was responsible for acquiring investments on behalf of our managed infrastructure funds and the bank’s balance sheets. One of my first assignments was the acquisition of a publicly traded municipal solid waste (MSW) management company (Waste Industries). While not technically infrastructure per-se, MSW has similar characteristics like being an essential service, operating regional monopolies, and controlling scarce assets. In any case we paid something like 8-9x EBITDA which was a premium to the then trading multiple. Waste Industries is now a small part of GFL Environmental which trades at 12x EBITDA. And GFL is actually at a notable discount to its peers of Waste Management, Republic Services, and Waste Connectionsthat are at 15x. While hindsight is 20/20, buying into this asset class 15 years ago would have been a home-run given their strong cashflow and multiple expansion.
While hazardous waste is not entirely comparable to their MSW brethren, CLH has many attractive attributes. They own and operate scarce assets including nine incinerators and eight landfills where new supply is limited by a complex permitting process and significant construction cost. They maintain vertically integrated operations that allow it to control waste from collection through transportation and disposal; this activity similarly requires specialized permits for which the company maintains over 500. As the largest player in the space, CLH has a proven history of managing waste properly – a key consideration amongst customers given environmental ramifications. They also have scale benefits that include route-based efficiencies, capacity utilization, and the deepest breadth of service offering…” (Click here to read the full text)
