Solid Waste & Recycling

Feature

Waste Stock Watch (January 01, 1999)

The months of October and November have been dynamic for capital markets. As was predicted in the last issue, the U.S. Federal Reserve decreased interest rates by another quarter of a per cent and the...


The months of October and November have been dynamic for capital markets. As was predicted in the last issue, the U.S. Federal Reserve decreased interest rates by another quarter of a per cent and the Bank of Canada quickly followed suit. At press time, the prime interest rate was 7 per cent in Canada and 8 per cent in the United States. The interest rate drops sparked movement in the equity markets. Many analysts predict another rate cut in the months to come that could greatly benefit the capital markets just in time for the RSP season.

While the Solid Waste Index has faired well and showed gains that are consistent with the DOW and TSE, other factors may have a direct impact on the companies. Companies providing oil field services have been greatly affected by the extremely low price of oil. While haulers enjoy the cheapest gas prices in memory, oil companies have suffered. (Oil is under $12 a barrel.) Similarly, low prices for copper and aluminum (as well as other metals) have hurt the metals recovery and recycling sector. Also, site decommissioning projects benefit from high metal prices and the recent lows have hurt their profitability.

The Montreal, Quebec-based Group Sani Mobile Inc. showed a strong gain of more than 100 per cent in the two-month period. At the same time, Philip Services Corp. continues to drag down the index as the stock loses value. There is an attempted restructuring in the works.

Stock Waste Watch

Index Companies Symbol Exc $ Jan 30 $Sept 2r $Nov 27 %Index %Chng Shares Orig Valu CurValu
Safety-Kleen Corp. SK N.Y. $ 3.94 $ 3.31 $ 3.31 15 0% 286 $1125 $ 946.66
Bovar Inc. BVR T.O. $ 0.61 $ 0.72 $ 0.81 10 +12..5% 1230 $ 750 $ 996.30
Conor Pacific Env. Tech. CPA T.O. $ 0.75 $ 0.70 $ 0.75 10 +7% 1000 $ 750 $ 750.00
Marsulex MLX T.O. $ 6.00 $ 4.95 $ 4.00 10 -19% 125 $ 750 $ 500.00
Anadime AEM T.O. $ 0.80 $ 0.32 $ 0.20 5 -38.5% 684 $ 375 $ 136.80
Philip Services Corp. PHV T.O. $12.10 $ 1.54 $ 0.80 5 -48% 31 $ 750 $ 24.80
Newalta Corp. NAL T.O. $8.20 $ 4.00 $ 2.90 5 -27.5% 46 $ 375 $ 133.40
Waste Management Inc. WMI N.Y. $23.75 $ 48.75 $43.94 10 -10% 20 $ 750 $ 878.80
Allied Waste* AWIN Nasdaq $20.38 $ 25.06 $19.94 10 -20% 37 $ 750 $ 737.78
Browning Ferris Industries BFI N.Y. $34.56 $32.63 $29.38 10 -10% 22 $ 750 $ 646.36
Group Sani Mobile Inc. SNB Mtl. $1.10 $ 0.70 $ 1.48 5 +111% 341 $ 375 $ 504.68
Sani Gestion Inc. SNG.A Mtl. $5.30 $ 7.60 $ 7.50 5 -1% 71 $ 375 $ 532.50
Total 100% $7500 $7232.00
(Note: numbers rounded, * denotes weighting change)

Hot Sector News

Bovar Inc. announced and paid an extraordinary amount of cash to shareholders in October and November. With cash in excess of $40-million, management decided to give shareholders back 50 cents per share–a combination of 41 cents in repayment of capital and a 9-cent dividend. The corporation had sold off several of its non-core assets in order to concentrate on its waste management business and, as a result, had built up large cash reserves in excess of capital and operating requirements for the foreseeable future. On the day that the special payment to shareholders came in to effect, the stock immediately dropped by the same amount. The stock had been trading in the 80-cent range and, upon execution of the payment, traded in the 30-cent range. (For the purposes of the index, the value of Bovar shares will be treated as though the special payment was not made and the intrinsic value of the shares will be 50 cents greater than the market indicates.)


Print this page

Related Posts



Have your say:

Your email address will not be published. Required fields are marked *

*