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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: gcrispin who wrote (31258)	8/5/2008 10:29:11 AM
From: gcrispin	Respond to of 78715

AW, RSG, and WMI have been holding up well the last six months. Part of this is due to the merger talks between AW/RSG and WMI/RSG. finance.yahoo.com But earnings for at least AW have also improved with wider margins. biz.yahoo.com Part of this is due to margin expansion and it is interesting to note how the increased price in recyclables are adding to the mix. Below is an excerpt from a Star Tribune article "Commodities prices for the materials bailed or binned out of recycling centers -- to be remade into new water bottles, cans, and more -- are climbing steeply, with analysts citing once again voracious demand out of China. A ton of recycled newsprint in the New York market rose from $120 in January to $200 this month, said Mark Arzoumanian, editor of industry publication Official Board Markets. Comparable increases on the recyclables spot markets have aluminum priced at $2,000 a ton and plastics at $440 a ton. That has haulers working to increase their emphasis on recycling, and the payoff is already showing up. At Allied Waste, for example, revenue from sales of recyclables rose 21 percent last year from 2006 to $257 million, according to its annual report." startribune.com The Enterprise/EBIDTA ration has remained reasonable for all three companies. finance.yahoo.com Finally, I believe that AW will be taken over by RSG. My view isn't fully recognized in the arbitrage between the two stocks. But I believe it is the deal that makes the most sense as it is an all stock transaction and the RSG managment is recognized as being the most capable of the big three companies.