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What Makes Republic Services (RSG) a Lucrative Investment Opportunity?

ClearBridge Investments, an investment management company, released its “ClearBridge Sustainability Leaders Strategy” second quarter 2024 investor letter. A copy of the same can be downloaded here. U.S. stocks increased during a difficult quarter for diversified portfolios due to the market leadership remaining centered around a few mega-cap firms that were thought to be the major winners in the expanding AI industry. The benchmark Russell 3000 Index returned 3.22% in the quarter. The strategy underperformed the benchmark in the second quarter and had gains in four of 10 sectors in which it was invested, on an absolute basis. Overall stock selection detracted the most, mainly stock selection in the IT, consumer discretionary, health care, industrials, and real estate sectors. Please check the top 5 holdings of the strategy, to know its best pick in 2024.

ClearBridge Sustainability Leaders Strategy highlighted stocks like Republic Services, Inc. (NYSE:RSG) in the Q2 2024 investor letter. Republic Services, Inc. (NYSE:RSG) is an environmental services provider in the United States and Canada. The one-month return of Republic Services, Inc. (NYSE:RSG) was 6.15%, and its shares gained 33.52% of their value over the last 52 weeks. On July 12, 2024, Republic Services, Inc. (NYSE:RSG) stock closed at $200.25 per share with a market capitalization of $63.065 billion.

ClearBridge Sustainability Leaders Strategy stated the following regarding Republic Services, Inc. (NYSE:RSG) in its Q2 2024 investor letter:

“We added two new names to the portfolio in the quarter. Republic Services, Inc. (NYSE:RSG) is a waste disposal company in the industrials sector whose services include non-hazardous solid waste collection, waste transfer, waste disposal, recycling and energy services. It is a stable-through-the-cycle compounder in a consolidated industry. The company’s end market is resilient, which gives us some confidence in the stability of its earnings through a recession. In the next few years, cash flow should grow at the high end of the range as Republic Services benefits from high-returning sustainability investments in polymer recycling and renewable natural gas, which also improve the company’s emission and circularity profile.

Republic Services continues to set ambitious goals around sustainability targets, such as increasing its renewable energy generation by 50% through the beneficial reuse of biogas. In addition, its 74 recycling centers process five million tons of materials per year and include a major polymers center for plastics. Notably, it is the first North American waste and recycling company with an emissions reduction goal approved by the Science-Based Targets initiative (SBTi).”

A fleet of trucks carrying recyclable materials, highlighting the company’s transfer services.

Republic Services, Inc. (NYSE:RSG) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held Republic Services, Inc. (NYSE:RSG) at the end of the first quarter which was 41 in the previous quarter. Republic Services, Inc. (NYSE:RSG) delivered revenue growth of 8%, adjusted EBITDA growth of 12%, and adjusted earnings per share of $1.45 during the first quarter 2024. While we acknowledge the potential of Republic Services, Inc. (NYSE:RSG) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed Republic Services, Inc. (NYSE:RSG) and shared the list of biggest waste management companies in the world. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

The best part? You can discover everything about this company and its groundbreaking technology right now.

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Wall Street calls this $3 stock a “Melting Ice Cube.” They said the same thing about BTI before it returned 90%.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

My name is Inan Dogan. I’m the co-founder and Research Director of Insider Monkey. I have an important message for you today.

Since March 2017, my stock picks have returned 16.5% annually. Today, I’ve found an opportunity even bigger than my British American Tobacco call.

Two years ago, Wall Street wrote off British American Tobacco (BTI) as a “melting ice cube.” The stock had crashed 40% from its peak, and consensus said the business was dying.

We looked under the cover and realized they were wrong.

We alerted our subscribers, and BTI returned 90% in just 16 months.

Now if you had invested just $10,000 in BTI in June 2024, you’d be sitting on $19,000 in October 2025.

Today, we have identified a nearly identical pattern in a digital-first giant trading at $3.

While the market panics over a surface-level revenue decline, our PhD-led research shows management has actually surgically cut $100 million in waste to focus on high-margin growth.

This pattern is a hallmark of our 16.5% annual return track record. The current opportunity offers a 400% upside potential—dwarfing even our 90% BTI return.

Get the ticker for our new “Underdog” pick and the full BTI case study for just 99 cents.

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