CWY - Cleanaway Waste Management

[sptrawler]

I think it all depends on whether the State Governments are willing to spend money to develop decent recycle facilities that actually recycle. as you say, passing the buck to other countries is becoming a big problem already. If they are then companies like Cleanaway could get a cut.

You are right, a mate works for waste management, on the local council. He says waste is becoming a huge headache, so a lot of councils are outsourcing and cleanaway are in the box seat to pick up the contracts.
They already have such a big footprint, they are able to take over council contracts, as a walk in walk out trouble free transition. That is why I have been watching for an entry point, all the stars have to line up, CWY at a buy point and my trading account having a balance.

 

[sptrawler]

There seems to be a few recycling companies, going broke, yet Cleanaway appear to be expanding into the space, I hope it is a good move.

 

[Value Hunter]

I do not really see the appeal of this company. its hugely capital intensive and according to the last annual report generated a return on equity of less then 6%. I am not sure why anybody would pay 30 times earnings for this company.....

I would only buy the stock if it was trading at a steep discount to book value.

 

[Knobby22]

Cleanaway just got SKM business cheap.
My attitude is that there is need for capital short term but long term profits will be much larger.
Many opportunities in recycling space.
Long term hold.

 

[sptrawler]

Cleanaway just got SKM business cheap.
My attitude is that there is need for capital short term but long term profits will be much larger.
Many opportunities in recycling space.
Long term hold.

I agree with you Knobby, however there does seem to be a lot of problems with recycling, in recent history it has been sent overseas but they are starting to refuse to take it.
I have read cleanaway want to build a waste to electricity high temp incinerator, but a lot of these in the past have hit hurdles be it environmental or location, the business has opportunities but many hurdles IMO.

 

[Knobby22]

You may be right SP.
It will take time and money and good management and we all know the Sharemarket is short term and risk averse.

 

[barney]

Bit nasty looking ….. Hope no one is getting punished too hard with that

 

[Knobby22]

Ouch, just sold. $1.83.
What the hell has happened?

 

[sptrawler]

Something must have been said at the AGM?
Wow, that is a hit.

 

[bigdog]

AGM ASX announcement today refer uploaded file below

Ahead of its AGM, Cleanaway has cautioned shareholders that first half earnings could be softer for FY20. The company cited lower economic activity, soft commodity prices, and lower volumes in Queensland due to a new landfill levy as weighing factors.

The waste management group expects earnings in the first half of FY20 to be in line with the first half of FY19. Despite the soft forecast, Cleanaway expects earnings in the second half of FY20 to be stronger than the first half of FY20 and the corresponding second half of FY19.

Cleanaway chief executive Vik Bansal reassured shareholders that all 3 of the company’s operating segments (solid waste, industrial waste and health services) in addition to pricing and cost reductions would result in stronger full-year earnings for FY20.

Mr Bansal also emphasised the potential in Cleanaway’s recent acquisition of SKM Recycling assets, which is the largest processor of recyclable household material in Victoria. In his address to shareholders, Mr Bansal stated that “their [SKM’s] economic model was centred around being a manufacturer, rather than a waste manager.” According to Mr Bansal, “by purchasing their [SKM’s] assets, Cleanaway is now working with councils to provide them with a correctly priced solution to their kerbside co-mingled waste.”

972

 

[Ferret]

The waste management group expects earnings in the first half of FY20 to be in line with the first half of FY19.

I guess the market sees CWY as a growth stock, so this disappointed. Reaction looks a bit overdone to me, but i always lose my squabbles with the market.

 

[So_Cynical]

Im tempted, been watching for a while.

 

[charlsie]

I jumped in yesterday at $1.70, thinking it maybe oversold. ive had it on my watchlist for a while with Bingo. I'm trying to diversify and my thinking is that as long as man walks this earth, we need someone to clean up after us.

 

[sptrawler]

Im tempted, been watching for a while.

I'm with you on it, at around these prices, they look like a good long term bet.IMO
As everyone says trash is going to end up being a big issue.

 

[Ferret]

Towards the end of the day I decided I'd do some averaging down and grabbed a few at $1.84.

I'm hoping CWY is ok in the longer term.

 

[sptrawler]

Towards the end of the day I decided I'd do some averaging down and grabbed a few at $1.84.

I'm hoping CWY is ok in the longer term.

Well councils are looking for ways to reduce their waste levels and cleanaway are an entrenched player in that space, so I would think they are fairly secure as long as management doesn't bite off more than it can chew.
I am hoping they don't bounce on Monday, as I wasn't able to access anything yesterday.
Just my opinion.

 

[Ferret]

Price hasn't gone anywhere this week, but I saw that Directors have done some buying this week.

This gives me a bit of confidence for the longer term.

 

[sptrawler]

There is starting to be a bit of momentum building, regards recycling and what to do about it, any increase will no doubt help CWY.
Also if legislation is imposed, it would have to help CWY's bottom line, as long as they can come up with a way of dealing with the product.

https://www.abc.net.au/news/program...mpulsory-recycling-targets-to-tackle/11671050

Just had a bit of a nibble today, so it should go down soon.

 

[sptrawler]

The pressure is building in the recycling space.

https://www.abc.net.au/news/2019-11-07/could-mandating-recycled-packaging-solve-the-crisis/11678850

 

[Value Hunter]

I am just curious the people on this thread who are buying the stock are not concerned with the massive capital intensity and persistent low returns on equity of the company?