Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and Waste Connections is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
Hauling garbage may not seem like the best way to make money, but Waste Connections has found its niche in what has become a huge moneymaking industry. Let's take an early look at what's been happening with Waste Connections over the past quarter and what we're likely to see in its quarterly report on Wednesday.
Stats on Waste Connections
Analyst EPS Estimate
Change From Year-Ago EPS
Change From Year-Ago Revenue
Earnings Beats in Past 4 Quarters
Source: Yahoo! Finance.
Will Waste Connections cash in on the trash this quarter?
Over the past few months, analysts have raised their earnings-per-share estimates by $0.02 for the just-ended quarter and $0.06 for full-year 2013. Investors have picked up on those moves, pushing the stock's price up more than 17% since mid-November.
In an industry dominated by much larger playersWaste Management and Republic Services , Waste Connections has had to take a somewhat different path to success. By avoiding highly competitive major metropolitan areas in favor of smaller cities and towns, Waste Connections has managed to grow to become the third-largest operator in the U.S., feeding growth with strategic acquisitions aimed at those second-tier markets.
Unfortunately, Waste Connections has largely missed out on a big trend in trash: alternative energy. With Covanta leading the industry in waste-to-renewable operations, Waste Management and Republic have both ramped up their projects to collect and use landfill gas as well as producing energy through trash incineration. By contrast, Waste Connections has minimal exposure to the space, which may be one reason its dividend yield lags behind its peers' payouts.
In Waste Connections' quarterly report, look for signs of how the company's acquisition of R360 Environmental Solutions has affected its business. With the deal having closed in October, R360 gives Waste Connections exposure to the waste-disposal market from oil and gas exploration and production. That's a potentially huge growth industry, especially with all the activity at new shale energy plays, and could be the catalyst that pushes Waste Connections into the spotlight in the year ahead.
Can Waste Connections beat its competition?
Waste Connections has some ambitious growth goals, but Waste Management has been a longtime favorite in the industry. Still, with tepid performance for the larger company's stock lately, investors are wondering whether Waste Management is really the best investment in the trash and recycling industry. Find out more by reading our premium analyst report on the company today. Just click here now for access.
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The article Waste Connections Earnings: An Early Look originally appeared on Fool.com.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends Republic Services and Waste Management and owns shares of Waste Management. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.