Progressive Waste Solutions Ltd. 2

Sound bite for Twitter and StockTwits is: Price is high on a number of tests. The stock price is high when doing the P/B Ratio, Dividend Yield and P/CF Ratio tests. I like the P/B Ratio and Dividend Yield tests because you are using real, compared to estimated values. The price is reasonable using the P/E Ratio test using 2015 EPS estimate. See my spreadsheet at bin.htm.

I own this stock of Progressive Waste Solutions Ltd. (TSX-BIN, NYSE-BIN). I first bought this stock in 2007 because TD Securities had a very favorable report on this stock and had it on it action buy lists. I had money because I had recently sold RIM. At that time it was an income fund. In 2010, I needed to buy something for Pension Account. I have this already and it was on TD Action Buy List.

Under insider trading, I find there was some $0.5M of insider buying and $0.4M of insider selling for $0.1M of net insider buying. This is too small of an amount to register at two decimal points of a percentage of the market cap. In 2014 outstanding shares were increased by 12,000 shares for stock options or 0.01% of the outstanding shares. This is a very small number also.

There is some insider ownership with the CEO owning shares worth $12.4M, the CFO owning shares worth $0.9M and the chairman owning shares worth $2.4M. Of course all this together is less than 1% of the stock's market cap.

The 5 year low, median and high median Price/Earnings per Share Ratios are 19.54, 23.66 and 27.77. These are a bit lower than the corresponding 10 year values at 20.90, 24.55 and 30.76. The current P/E Ratio is 23.06 based on a stock price of $34.85 and 2014 EPS of $1.51 CDN$ or $1.23 US$. This stock price test suggests that the stock price is relatively reasonable.

I get a Graham Price of $20.92. The 10 year low, median and high median Price/Graham Price Ratios are 1.29, 1.52 and 1.79. The current P/GP Ratio is 1.67 based on a stock price of $34.85. This stock price test suggests that the stock price is relatively reasonable.

I get a 10 year Price/Book Value per Share Ratio of 1.92. The current P/B Ratio is 2.71, a value 41% higher. This stock price test suggests that the stock price is relatively expensive.

Because this used to be an income trust with very high dividend yields, you really cannot get a fix on the current stock price using historical dividend yields. The best is the 5 year median dividend yield. This dividend yield is 2.37%. The current Dividend Yield at 1.85% is some 22.6% higher. This stock price test suggests that the stock price is relatively expensive.

Another test we can use is the Price/Cash Flow per Share Ratio. Since the reporting is in US$, I will use the US$ values. The 10 year median P/CF Ratio is 6.19. The current P/CF Ratio at 8.58 is some 39% higher. This stock price test suggests that the stock price is relatively expensive. Using CDN$ values, the test comes out basically the same.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus is a Buy. The 12 month stock price consensus stock price is $32.10 US$ or $39.44 CDN$. This implies a total return of $15.02% with 1.84% from dividends and $13.18% from capital gains.

The web site called The Market Daily talks about what analysts are saying about this stock. There is an article in the Daily Journal about this company addressing complaints in Thibodaux, Louisiana. A recent article in the G&M by Brenda Bouw talks about buying this stock as an defensive play .

This is the second of two parts. The first part was posted on Wednesday, May 27, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Progressive Waste Solutions Ltd. are a full-service waste management company providing non-hazardous solid waste collection and landfill disposal services for municipal, commercial, industrial and residential customers in five provinces and ten US states. Two-thirds of their business is in US. The fund operates through its subsidiaries. Its web site is here Progressive Waste.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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