1. Clean Harbors (CLH) is an under-the-radar hedge for so-called black-swan events. The increasing frequency of unexpected market-moving phenomenon is a topic of debate in the financial community. Clean Harbors is a beneficiary of unforeseen natural disasters. Its business spiked due to Hurricane Katrina, the BP (BP) spill and, now, investors expect contracts for the Japan clean-up.
Clean Harbors, founded in 1980 by Chief Executive Officer Alan McKim, has an emergency-services division with expertise in cleaning up chemical spills and infectious contaminants. It is a key growth division for the Norwell, Massachusetts-based company.The division consults with governments, providing planning, logistics and project-management services. McKim disclosed to CNBC that his firm has already been contacted by Japanese officials. Although Clean Harbors is technically a small-cap company, its participation in the aforementioned headline clean-up efforts has elevated it to the status of disaster-logistics go-to. Clean Harbors has grown its sales, net income and earnings per share 22%, 43% and 31% annually, on average, since 2008 and its stock delivered annualized gains of 13% over that span. Although Japan is the latest catalyst for the equity, global warming, and its resulting environmental volatility, could continue to provide Clean Harbors with lucrative global expansion opportunities. Analysts have a positive, though not ebullient, view of the stock, with eight ranking it "buy" and six rating it "hold." None rank the shares "sell." The stock has a median target of $100.54, suggesting a 12-month rise of 7%. RBC Capital ranks it a "top pick" and forecasts an advance of 14% to $107. In contrast, Goldman Sachs ranks it "neutral", expecting a fall to $85. Uncertainty plagues the stock as the scope of Japan's clean-up efforts are undisclosed as is Clean Harbors' depth of involvement. Goldman's "neutral" ranking is justifiable based on valuation. The stock costs 23-times forward earnings and 3.2-times book value. Those multiples signify premiums to industry and peer averages. Still, Clean Harbors' recent business performance is praiseworthy. Its fourth-quarter adjusted earnings surged 71% to 88 cents, exceeding consensus by 11%. Sales grew 20% to $417 million, outperforming consensus by 6.7%. Profit margins improved, as well. The gross margin stretched from 27% to 30% and the operating margin widened from 8.2% past 10%, amplifying the bottom-line. Unlike CB&I, Clean Harbors is comparatively uncorrelated to the market, with a beta value of 0.4. And it often gains on events, which negatively impact other equities. It has risen 2.5% in March as the S&P 500 fell 3.5%. Clean Harbors' quarterly return on equity improved to 16% from 5.7% in the year-earlier quarter, exceeding the industry average of 13% and the S&P 500 average of 13%. Its return on assets stretched from 2.6% to 8.1%, demonstrating improved efficiency. At quarter's end, Clean Harbors held $305 million of cash, for an ample quick ratio of 2.2, and $279 million of debt, for a reasonable debt-to-equity ratio of 0.4.
Visit the 2 Unknown U.S. Companies to Rebuild Japan Portfolio on Stockpickr.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV