Hi Sergio -
Waste Management, Inc. Common S(NYSE: WM )
This is one on my buy list below $30.00/share. You have to look a bit outside the box where their past operating figures just do not represent their "possible" future efficiencies. What if the company could operate their fleet of trucks at 50% of what it cost them in the past?
Would the company appear to you to be more valuable? Their FCF numbers would certainly increase as well as their net income.
Natural gas vehicles catching on
thefreepress.ca
From the article:"...Waste Management is realizing 50 per cent savings, the trucks have similar range to diesel models, and the company looks forward to converting the rest of its 100-truck fleet, Sadler said...."
Waste Management plans to convert fleet to cng
by Pittsburgh Tribune-Review
Thursday, November 17, 2011
pittsburghlive.com
From the article:"...Waste Management Corp. plans to convert its waste hauling and recycling truck fleet at its Arden Landfill near Washington to run on compressed natural gas rather than diesel fuel, the company said on Wednesday...".
WM to convert Columbus, Ohio, fleet to CNG
wasterecyclingnews.com
This is happening across the US in many of the WM service areas. The company is working on converting their fleet of diesel trucks to NG. This is being done w/o any government subside. It just makes economic sense (ie excellent ROI).
I suspect this will become a longer term trend over time. This is one of these transforming "disruptive" technologies that makes several of these companies more efficient. Many of the pieces are already in place (like cheap NG from domestic shale) and efficient NG engines. This type of conversion should be done in our rail fleets too.
For Waste Management, they will see significant cost savings over time as they complete more of these conversions over time. The company is also looking at new incineration technologies to reduce land fill waste and generate electricity. There are a lot of efficiency gains to be achieved in many of their operations as new types of technologies are integrated into their daily operations.
Just "Google" Waste Management and Natural Gas and co-generation and waste disposal. This is a huge industry where waste collected now becomes a useful fuel and when processed through a more integrated system can create methane gas, generate electricity and even create fresh organic compost that is sold back to their customers.
I think we are just beginning to see us reinvent some of these old companies/industries (it's always been done this way mentality) into very efficient 21st century integrated processing centers.
EKS |
