Shorting CWST - Casella Waste Systems, Inc.

What Does Casella Do?

The Company provides collection, transfer, disposal and recycling services to residential, industrial and commercial customers, in the eastern United States.

The Bears: Horrid Financials

The financials on Casella Waste Systems are horrendous.  Sales, margins, free cash flow, and debt have all been steadily worsening over the past three years.  Furthermore, their book net equity is all goodwill (negative tangible equity).  Even if they meet growth estimates (15%), it will take them a couple decades to catch up to their P/E.  This one belongs in the trash bin! 

The Bulls: Recycling, Green Movement

While Casella Waste Systems is a waste disposal company, they are putting lots of effort into expanding into and focusing on recycling.  The drive in this sector these days is towards "zero waste," which means recycling trash that can't be eliminated.  Waste producers are currently paying large taxes and fines, if Casella times their innovations with the green movement, they could come out ahead of the competition.