Waste Management Stock Testing Price Floor – Buy Now?
Waste Management (WM) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($190.65 – $210.71), levels from which it has bounced meaningfully before. In the last 10 years, Waste Management stock received buying interest at this level 5 times and subsequently went on to generate 12.3% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 2/15/2024 | 7.8% | 41 |
| 6/7/2024 | 11.4% | 45 |
| 7/26/2024 | 7.7% | 35 |
| 9/18/2024 | 13.2% | 70 |
| 1/2/2025 | 21.2% | 151 |
But is the price action enough alone? It certainly helps if the fundamentals check out. For WM Read Buy or Sell WM Stock to see how convincing this buy opportunity might be.
We go beyond just equities. Is a portfolio of 10% commodities, 10% gold, and 2% crypto in addition to equities and bonds – likely to return more during the next 1-3 years, and protect you better if markets crash 20%? We have crunched the numbers.
Here are some quick data points for Waste Management that should help decision:
- Revenue Growth: 15.9% LTM and 8.6% last 3 year average.
- Cash Generation: Nearly 9.7% free cash flow margin and 17.6% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in last 3 years for WM was 4.8%.
- Valuation: WM stock trades at a PE multiple of 31.5
For quick background, Waste Management provides waste management and environmental services across North America, operating 255 landfills and landfill gas-to-energy facilities for residential, commercial, industrial, and municipal clients.
| WM | S&P Median | |
|---|---|---|
| Sector | Industrials | – |
| Industry | Environmental & Facilities Services | – |
| PE Ratio | 31.5 | 23.7 |
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| LTM* Revenue Growth | 15.9% | 5.6% |
| 3Y Average Annual Revenue Growth | 8.6% | 5.3% |
| Min Annual Revenue Growth Last 3Y | 4.8% | -0.0% |
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| LTM* Operating Margin | 17.6% | 18.8% |
| 3Y Average Operating Margin | 18.4% | 18.2% |
| LTM* Free Cash Flow Margin | 9.7% | 13.4% |
*LTM: Last Twelve Months
What Is Stock-Specific Risk If The Market Crashes?
Walmart isn’t immune to big drops. It fell nearly 78% in the Dot-Com Bubble and over 41% during the Global Financial Crisis. Even in smaller sell-offs, like the 2018 correction and inflation shock, it dipped around 12% to 17%. The Covid pandemic pulled it down about 30%. Solid fundamentals matter, but when the market turns, losses hit pretty deep.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.