A prudent investment decision involves buying well-performing stocks at the right time, while selling those that are at risk. A rise in share price and strong fundamentals signal a stock’s bullish run.
Clean Harbors, Inc. (CLH - Free Report) is a waste removal services stock that has performed well so far this year and has the potential to sustain the momentum in the near term. Consequently, if you have not taken advantage of its share price appreciation yet, it’s time you add the stock to your portfolio.
What Makes It an Attractive Pick?
An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse on a year-to-date basis. Shares of Clean Harbors have returned 35.4% on a year-to-date basis, outperforming the 19.4% rise of the industry it belongs to.
Solid Zacks Rank: Clean Harbors currently sports a Zacks Rank #1 (Strong Buy). Our research shows that stocks with a Zacks Rank #1 or 2 (Buy) offer attractive investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Over the past 90 days, the Zacks Consensus Estimate for current-quarter earnings has increased 1.6%. For 2019 and 2020, the estimates have moved up 16.7% and 18.3%, respectively, over the same time period.
Positive Earnings Surprise History: Clean Harbors has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in all the previous four quarters, delivering an average positive earnings surprise of 133.5%.
Strong Growth Prospects: The Zacks Consensus Estimate for current-quarter earnings is pegged at 62 cents, indicating year-over-year growth of 14.9%. Moreover, earnings are expected to register 44.4% growth in 2019 and 20.8% in 2020.
Growth Factors: Acquisitions have been acting as a key growth catalyst for Clean Harbors. In 2018, the company completed two acquisitions that of a privately-owned company in August and the U.S. Industrial Cleaning Business of Veolia Environmental Services North America LLC (the "Veolia Business") in February.
While the privately-owned company expanded Clean Harbors’ environmental services and waste oil capabilities, Veolia boosts the company’s U.S. Industrial Services business. Additionally, the company witnessed $154 million of direct revenues from the Veolia Business in 2018.
In 2017, Clean Harbors completed four acquisitions that contributed revenues of almost $14.5 million. Additionally, the buyouts have helped the company in multiple lines of services such as waste minimization; remodeling of its fleet of trucks, growth in daylighting and hydro excavation services markets. These also complement its closed loop model in relation to the sale of oil products.
The company's focus on improving its efficiency and lowering operating costs through enhanced technology, process efficiencies and stringent cost management are appreciable. It continues to make capital investments to enhance its quality and comply with government and local regulations.
Moreover, Clean Harbors has a diversified customer base ranging from Fortune 500 companies to mid-size and small public and private entities, which provide it with stable and recurring sources of revenues. The company has been chosen as an authorized vendor by large and small generators of waste as it has comprehensive waste disposal and waste tracking capabilities.
Other Stocks to Consider
Some other top-ranked stocks in the broader Zacks Business Services sector are WEX (WEX - Free Report) , Navigant Consulting and FLEETCOR Technologies (FLT - Free Report) . While Navigant Consulting sports a Zacks Rank #1, WEX and FLEETCOR carry a Zacks Rank #2.
Long-term expected EPS (three to five years) growth rate for WEX, Navigant Consulting and FLEETCOR is 15%, 13.5% and 16.5%, respectively.
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