Right now, Clean Harbors looks more expensive than it did when I first purchased it; it now trades at 18 times forward earnings and sports a PEG ratio of 2.03. However, I’d bet analysts haven’t been able to get a good grip on the company’s growth due to certain lumpy elements of its business, such as disaster relief, nor the coming benefits of the Safety-Kleen acquisition.
Although the CFO resignation may seem dire, the position will actually now be filled by Vice Chairman, President, and Chief Operating Officer James Rutledge, who previously served as CFO from 2005 through 2012. Gagnon was only on board as CFO since August 2012, and while it raises eyebrows, Rutledge’s resumption as CFO is hopefully a good sign and not a negative one.
Buying on low tide
It seems to me it’s a fortuitous time to add more Clean Harbors shares to the Prosocial Portfolio. Times of weakness are the best times to buy, and in my opinion, Clean Harbors’ recent share price weakness has been overdone.
The article Diving Into More Clean Harbors originally appeared on Fool.com and is written by Alyce Lomax.
Alyce Lomax owns shares of Waste Management. The Motley Fool recommends Republic Services, Veolia Environnement (NYSE:VE) (ADR), and Waste Management. The Motley Fool owns shares of Clean Harbors and Waste Management.
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