advanced disposal stock

Advanced Disposal Stock Analysis NYSE-ADSW – takeover shows what can happen to other similar stocks

Advanced Disposal stock analysis is part of a full Waste Management stocks sector investing analysis alongside a list of 15 waste management stocks, all analyzed.

Advanced Disposal Services was recently acquired by Waste Management (NYSE: WM) for $33.15 per share. This is important because it shows how economies of scale are the key in the waste management business and consequently that bigger players will look for scale and growth through consolidating smaller players.

Advanced Disposal stock price

Advanced disposal stock analysis - waste management acquisition
Advanced disposal stock analysis – waste management acquisition

This has two benefits for investors; one is the growth that the large players will create while the other is the benefit you immediately receive when the business you own is take over at a 30% or higher premium to current stock prices.

ADSW was purchased for $33.1 in cash while investors expecting a 10% investment return from ADSW’s business, should not had paid more than $20 per share, including the value of the assets. So, to fully take advantage of investing in the sector, you want to buy when the actual business is delivering a satisfactory yield, be it 10% or 15% if you are like me, and then sell when the market decides to pay full value, where a 5% return is satisfactory for companies like Waste Management. Sounds strange? Well, if you can borrow at 4% and get a 5% return on your investment, you get rich quickly, plus if there are synergies even faster.

Don’t forget to check the full list of waste management stocks analyzed and the waste management sector analysis.

Sven Carlin Ph.D., the author, is an independent stock market researcher and investor managing the Sven Carlin Stock Market Research Platform.

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