NEW YORK (TheStreet) -- Progressive Waste Solutions (BIN) stock is up by 6.08% to $24.61 in mid-morning trading on Tuesday, after the company confirmed it is conducting a "review of strategic alternatives with the objective of enhancing shareholder value."
The Canadian waste management company is exploring a possible sale as costs rise, sources told Bloomberg.
Progressive Waste announced on Monday that it has established a board of directors committee to review possible strategic alternatives. Additionally, the company has hired JPMorgan Securities (JPM) as its financial adviser.
"There can be no assurance that the review of strategic alternatives will result in any change in the company's business strategy or in the consummation of any agreement or transaction, and if one does occur, what the economic and other terms and conditions of any transaction might be," the company said in a statement on Monday.
Finding a buyer could be challenging because of the high cost of acquiring Progressive Waste, sources told Bloomberg.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate PROGRESSIVE WASTE SOLUTIONS as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has increased to $141.00 million or 46.54% when compared to the same quarter last year. In addition, PROGRESSIVE WASTE SOLUTIONS has also vastly surpassed the industry average cash flow growth rate of -8.26%.
- 37.23% is the gross profit margin for PROGRESSIVE WASTE SOLUTIONS which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.68% trails the industry average.
- PROGRESSIVE WASTE SOLUTIONS's earnings per share declined by 41.7% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, PROGRESSIVE WASTE SOLUTIONS increased its bottom line by earning $1.12 versus $1.01 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Commercial Services & Supplies industry. The net income has significantly decreased by 43.9% when compared to the same quarter one year ago, falling from $40.81 million to $22.91 million.
- The share price of PROGRESSIVE WASTE SOLUTIONS has not done very well: it is down 23.27% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- You can view the full analysis from the report here: BIN