Back to top

Image: Bigstock

Bear Of The Day: Clean Harbors Inc (CLH)

Read MoreHide Full Article

Clean Harbors (CLH - Free Report) is a Zacks Rank #5 (Strong Sell) despite a recent earnings beat.  Let's take a look at why this stock has the lowest Zacks Rank and if there is a better play in the same space.

Description

Clean Harbors, Inc. provides environmental, energy, and industrial services in North America. The company operates through two segments, Environmental Services and Safety-Kleen. The Environmental Services segment collects, transports, treats, and disposes hazardous and non-hazardous waste. The Safety-Kleen segment offers specially designed parts washers; automotive and industrial cleaning products, such as degreasers, glass and floor cleaners, hand cleaners, absorbents, antifreeze, windshield washer fluids, mats, and spill kits. Clean Harbors, Inc. was founded in 1980 and is headquartered in Norwell, Massachusetts.

Earnings History

As noted, the most recent report was a beat of the Zacks Consensus Estimate.  I see the company reported EPS of $0.28 when $0.10 was expected and that translates into a positive earnings surprise of 180%.  

The beat broke a streak of two miss and another small beat before that. So two beats and two misses in the last four quarters isn't horrible.  

Estimate Revisions

Estimate for CLH have been falling and that is the main reason the stock is  Zacks Rank #5 (Strong Sell) .  I see estimates for this quarter falling from $0.75 to $0.71, then down to $0.30 7 days ago.  Now the estimate for this quarter stands at $0.14 and that is a long ways away from the $0.75 it was at 60 days ago.

Full year estimates carry more weight on the Zacks Rank, and they have fallen from $2.24 to $1.00 for this year.  Next year has dropped from $2.67 to $1.58.

Valuation

The lower estimates have helped the forward PE to balloon higher.  I see a 58x forward earnings multiple with only 1.5% topline growth in the most recent quarter.  Price to book at 2.5x is low enough to attract interest from value investors, but growth investors will not like the 0.9x price to sales multiple as that suggests that each incremental sales dollar is not being rewarded by Wall Street.

Chart

 

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.

This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.

See their latest picks free >>


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Clean Harbors, Inc. (CLH) - free report >>