Stocks in the waste management sector crushed it Wednesday, rising in tandem after an upgrade from a top industry analyst as investors sought safety amid the market turbulence.
US Ecology (ECOL) led the way up, rising 5.7% to $45.62 a share, after UBS analyst Jon Windham hiked his rating on the disposal company's stock to buy from neutral in a bullish report on the outlook for the waste management sector.
Waste Management (WM) , Waste Connections (WCN) and Republic Services (RSG) also posted sizable gains on the heels of the UBS report, which noted the waste disposal sector typically lags the overall economy by 12 to 18 months.
UBS's Windham also boosted his rating on Waste Management to buy from neutral.
Waste Management jumped 4.22% to $117.47, Waste Connections rose 3.23% to $101.42 a share, while Republic Services gained 3.34% to $94.36 a share.
The UBS analyst called out Waste Connections as the leader of the group.
Waste volume and prices tend to lag the overall economy, helping make the sector particularly attractive amid the turbulent market and economic climate, according to the UBS analyst. Also a plus is the contracted, fee-for-service nature of the business, Windham noted.
The UBS analyst also noted recent share price declines at Republic Services and Waste Management, arguing the lower valuations provide a solid buying opportunity for investors.
Waste Management beat analyst estimates when it released its fourth-quarter financials in mid-February, reporting earnings per share of $1.19 compared with $1.17 predicted by analysts surveyed by Zacks Investment Research.