Why Clean Harbors, Inc. Might Keep Plunging

Does this analyst make a good case or is it just more noise from Wall Street?

Feb 27, 2014 at 10:04AM

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Clean Harbors, Inc. (NYSE:CLH) slipped in premarket trading Thursday after Wedbush Securities downgraded the environmental services company from outperform to neutral.

So what: Along with the downgrade, analyst Al Kaschalk lowered his price target to $50 (from $74), representing about 9% worth of upside to yesterday's close. While contrarians might be attracted to yesterday's earnings-related 14% plunge, Kaschalk thinks that Clean Harbors' appreciation prospects remain limited given management's disappointing execution of late.

Now what: According to Wedbush, Clean Harbors' risk to reward trade-off is pretty balanced at this point. "[W]e cannot continue to justify our positive rating until we see an improvement in base business fundamentals and tangible evidence of improved execution on management's part," noted Kaschalk. "Further, management initiated a cost-reduction program to bring cost structure more in line with the company's current revenue profile. We believe a more detailed strategic review of company's business lines could result in small divestitures, while driving an improved capital return profile for the company." Of course, with Clean Harbors now off about 30% from its 52-week highs and trading at a forward P/E in the low teens, Wall Street's concerns might be providing patient Fools with a solid long-term opportunity. 

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Brian Pacampara has no position in any stocks mentioned. The 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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