In a concerted effort to augment its market presence,
Waste Management, Inc.
) recently acquired two energy services companies - Summit Energy
Services and Liquid Logistics in North Dakota for an undisclosed
amount. The acquired businesses will enable Waste Management to
expand its environmental service offerings to oil and gas
industry customers engaged in the Bakken Shale formation - one of
the largest oil fields in the U.S.
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With the twin acquisitions, Waste Management has put on board an
additional 140 employees with an expertise in roustabout and oil
well-site maintenance, road and well-site pad construction, storm
water and erosion control management, aggregate crushing and
sales and well monitoring pumping. Buoyed by such human capital,
Waste Management intends to eventually add service offerings such
as rig maintenance and tank cleaning, drill cuttings
solidification and disposal in its portfolio.
Waste Management expects 2013 adjusted EPS to be in the range of
$2.15 -$2.20. Free cash flow is projected between $1.1 billion
and $1.2 billion. We remain encouraged about the acquisitions and
expect the company to meet its earnings guidance.
Headquartered in Houston, Texas, Waste Management is the largest
provider of comprehensive waste management services in North
America. The company provides collection, transfer, recycling and
resource recovery, as well as disposal services to nearly 20
million residential, commercial, industrial and municipal
customers. It is also a leading developer, operator and owner of
waste-to-energy and landfill gas-to-energy facilities in the U.S.
Currently, Waste Management has five operating groups including
Eastern, Midwest, Southern, Western, and the Wheelabrator. The
Wheelabrator group includes the company's waste-to-energy
facilities and independent power production plants. The company
also has a joint venture with Linde Group, which includes a plant
that converts landfill gas into liquefied natural gas for use as
fuel in the company's trucks.
Waste Management has a Zacks Rank #3 (Hold). Other stocks in the
industry that look promising and are worth considering now
US Ecology, Inc.
) with a Zacks Rank #1 (Strong Buy), and
Heartland Payment Systems, Inc.
), both carrying a Zacks Rank #2 (Buy).