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Analyst Blog

Shares of Waste Management, Inc (WM - Analyst Report) hit a 52-week high of $45.73 during yesterday’s trading session. However, the stock closed the session at $45.41, which reflects a solid year-to-date return of 33.7%. The average trading volume for last three months aggregated 1.7 million shares.

Despite its strong price appreciation, this Zacks Rank #2 (Buy) stock still has enough fundamentals that may further drive the stock upward. Its strong estimate revisions over the last 30 days and a long-term EPS growth expectation of 10.5% are some catalysts driving the stock.

Growth Drivers

Impressive third-quarter 2013 results that comprised higher sales across its businesses, top-line growth and new product launches were the primary driving factors for Waste Management.

On Oct 29, Waste Management reported third quarter net income of $291 million or 62 cents per share that improved from $214 million or 46 cents per share in the year-ago quarter.

The company has been making efforts to increase its internal revenue growth from yield. Coupled with that, Waste Management’s ongoing initiatives to reduce cost also added to its growth. We also remain encouraged by the record top-line growth of the company and expect it to continue its bull run in the coming quarters.

In addition, the company maintains a sound and flexible balance sheet with ample liquidity that enables it to capitalize on potential acquisition opportunities to fuel its top-line growth.

Estimate Revisions

Over the last 30 days, 3 out of 7 estimates for 2013 have been revised upward while none of the estimates were revised lower, which led to a 0.9% rise in the Zacks Consensus Estimate to $2.19 per share. For 2014, 3 out of 10 estimates moved upward, helping the Zacks Consensus Estimate advance 0.8% to $2.38 per share.

Other Stocks to Consider

Other stocks that look promising and are worth a look now include Navigant Consulting Inc (NCI - Analyst Report), Global Payments Inc. (GPN - Snapshot Report) and  Republic Services Inc. (RSG - Analyst Report), each having a Zacks Rank #2 (Buy).