Why Clean Harbors' Share Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of environmental cleanup company Clean Harbors (NYSE: CLH  ) jumped 17% today, in a delayed reaction to a big acquisition.

So what: The market was closed for the last two days, so there was a delayed reaction to the company's $1.25-billion cash acquisition of Safety-Kleen that was announced Monday. The company said the acquisition will add more to Clean Harbors' growth, than save costs with synergies. 

Now what: The acquisition looks to be very fairly priced, after Safety-Kleen generated $1.3 billion in revenue, and $161 billion in EBITDA last year. The complimentary companies will now be able to dominate the hazardous cleanup industry that should continue to grow as the energy space grows. I think Clean Harbors can move higher long-term, but I would be leery of buying on today's jump. A pullback in shares would be a much more attractive entry point following this acquisition.

Interested in more info on Clean Harbors? Add it to your watchlist by clicking here.

 

Fool contributor Travis Hoium has no positions in the stocks mentioned above. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDrawThe Motley Fool owns shares of Clean Harbors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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