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Gold/Mining/Energy : Waste Management Inc. (NYSE: WMI) -- Ignore unavailable to you. Want to Upgrade?

To: gcrispin who wrote (79)	3/8/2001 11:26:31 PM
From: Wyätt Gwyön	Respond to of 97

gcrispin, Some of that tech money is flowing toward the trash king. No kiddin. I can't believe all the value stocks breakin out--all that tech dough doesn't just go to money heaven! siliconinvestor.com

To: gcrispin who wrote (79)	4/7/2001 11:01:25 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 97

the Trash King gets a nice plug in Barron's (interview w/Legg Mason's William Miller)> Q: And what do you require to stick with a stock? Waste Management certainly tried everyone's patience. A: When we acquired it Waste Management was in the low 50s. Then it turned out the accounting was all messed up and the cash flows we expected weren't there. There were integration problems, systems problems and everything else. But the issue for us is always what are the long-term economics of the business and can those economics be realized and over what period of time? And finally, as I said at the onset, what is discounted in the current price? What we found all the way down was that the market was consistently overdiscounting the news flow and the fundamentals, and that led us to keep buying it. So we bought I don't know how many millions of shares in the low teens. Now the turnaround is evident. The stock has done very well. But there is a long, long way to go on Waste Management over a long period of time. We hope to own it for five, 10 years or more. Q: What are some of the fundamentals that make this picture look so good for the long term? A: This is a company with 28% market share in an absolutely essential industry that has no foreign competition. It has no dollar risk, there is no technological risk. It has long-term economics such where you can earn 20%-plus operating margins. They will generate about $1 billion of free cash flow this year, and that will grow at least 10%-15% a year over time. You have a team led by Maury Myers that is absolutely first rate and doing all the right things. The operating margins are in the mid-to-high 20s right now, and that's before the company has even begun to think about implementing selective price increases. Their systems integration process is still not complete. They are doing a lot of studies of pricing and we would expect that disposal prices, for example, would begin to turn up in the next 12 months or so. There is a lot of pricing flexibility in this business. With low-single-digit unit growth and 3% to 5% price increases per year, you can get to 12% to 15% earnings growth with some repurchase activity on a long-term basis. interactive.wsj.com Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved.