Waste Management Inc. is its industry's leading provider of
comprehensive waste management services. Based in Houston, the
Company serves municipal, commercial, industrial, and residential
customers throughout North America.
[Source: Company Press Release]
Reasons to Invest:
I have been watching this week's Drip candidate for quite some
time now, but I can wait no longer. Time is wasting away, and
entry points are hard to come by in this market of uncertainty.
Waste Management Inc (WMI) has finally broken over the top of its
five-month resistance of $30.00. On top of that they have 12
major brokers covering their stock, and all of them have a
"neutral" to "strong buy" rating. Not to mention a hefty
dividend yield of 2.46%.
For the fiscal year ended on 12/31/03, sales grew by 4% to $11.7
billion. Their closest competitors don't even come close to
comparing to their market cap (17.57 billion), employees
(51,700), revenue growth (3.90%), revenue (11.57 billion), and
net income (719 million). WMI currently has a Trailing P/E of
25.06 and a forward-looking P/E of 17.40.
Over the past four weeks, Waste Management, Inc was ranked in the
top 30% of its industry. They have a 42-week change of 44.31%
and 11.08% relative to the S&P 500.
Recent news developments have been neutral for WMI, and mainly
consist of new CEO, CFO, VP and CIO announcements. Therefore I
see no need to run on about these rather lack-luster articles.
As I have previously mentioned I have been waiting for the
breakout on WMI for about two to three months. WMI opened on
Monday (03/29/04) at 28.50, and climbed as high as 31.00 on
Friday. Since March of 2003, WMI has been trending from top to
bottom of a solid regression channel. Two weeks ago, WMI closed
below its regression channel for the first time, but quickly
rebounded back into the channel, shooting strait over its long-
term resistance of 30.00 on Friday, finally closing at 30.45.
I note a strong buy signal on the MACD indicator, while a fresh
bearish crossover is apparent on the Stochastics indicator. I
believe that the bearish crossover on the Stochastics indicator
has recently formed due to the breakout over strong resistance,
which carried WMI into overbought territory. If we can see WMI
use this old resistance level as support for new highs, the next
psychological resistance level would be at 32, which was
resistance for the last six months of 2001. My hope is to see
further strength in the stock, and a breakout over 32. If 32 is
broken there's no telling how high, or how long, WMI will surf
I see strong strength in the fact that WMI's 10-DMA has been over
its 03-DMA (on the weekly chart) since April of last year. As
mentioned in previous articles, when the 10-DMA is resting over
the 30-DMA it is generally a good sign of bullishness. On that
note, the Monthly chart looks even more impressive, especially
since the MACD has been on a buy signal since middle of 2003.
WMI is currently on a Double Top Breakout in respects to its
Point and Figure chart. There is a revised price objective of
51.50 on the stock, however I think that is a bit too optimistic,
as WMI has not seen the 50+ range since mid 1999. I would be
happy to see a return to 43.00, any further upside after that is
just icing on the cake.
Waste Management, Inc currently offers an annual dividend of
$0.75 per share owned, which I previously mentioned tallies out
to a 2.46% yield.
This ends another exciting episode of the DripAdvisor.com Drip of
the Week. Stay tuned next week, as we will spotlight another
stock worthy of the DripAdvisor.com limelight.
Until Next Week,
Strong Buy 5
Strong Sell 0
Brokers Covering 12
Shares to Qualify = 1
Auto-reinvestment = Yes
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Temper Enrollment: Yes
Min/Max Investment = $50-$100,000/year
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Auto reinvestment fees: $1.50 + $0.10 per share
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