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  • ‘Trash Gas For Trucks’ And Other Energy Opportunities

    How would you like to become an investor and “partner” in one of the most lucrative businesses on the planet? It’s a business that is almost “recession-proof” and getting bigger every year.

    With the world’s population recently reaching the 7 billlion mark, the waste disposal, recycling and “trash gas” business is about to “explode” in size and profitability.

    You’ve never heard of the “trash gas” business? Neither had I until I recently watched this video titled “Greening the Most Unlikely Items.”

    I’m here to tell you that in watching this video and studying this topic in depth, an educated person will see that this is a lucrative “frontier” whose time has come.

    As Victor Hugo said, “There’s nothing more powerful than an idea whose time has come”, and on the web page mentioned above they explain a principle that even Benjamin Franklin would get excited about:

    “Waste not, want not – from landfills to sewage treatment plants, innovators around the country are working on ways to reduce humanity’s environmental footprint and get more from our waste. This week, energyNOW! explores the ways people are “going green” in unlikely areas.”

    The story highlights the “best-in-breed” company in the “waste management services” industry: Waste Management Inc. (WM), which provides waste management services to residential, commercial, industrial, and municipal customers in North America.

    The company also owns, develops, and operates waste-to-energy and landfill gas-to-energy facilities in the United States.

    Its collection services involves in picking up and transporting waste and recyclable materials from where it was generated to a transfer station, material recovery facility, or disposal site; and recycling operations include collection and materials processing, plastics materials recycling, and commodities recycling.

    In addition, it provides recycling brokerage, which includes managing the marketing of recyclable materials for third parties; and electronic recycling services, such as collection, sorting, and disassembling of discarded computers, communications equipment, and other electronic equipment.

    WM knows how to make money for their shareholders, and that’s why at the current price of around $ 31.50 its dividend is yielding around 4.3%. You can’t get that from a 30-year U.S. Treasury bond, currently yielding 3.1%.

    WM is selling at a forward PE of around 13, and ironically it generates over $ 13 billion a year in revenue, which equates to a $ 27.79 revenue-per-share outcome.

    Looking at their balance sheet, the only part I don’t like is the almost $ 10 billion in debt. But with an operating cash flow (ttm) of close to $ 2.4 billion and an operating margin (ttm) of around 16%, it should generate plenty of cash and net profits.

    Another waste management services company highlighted in the video is Republic Services Inc. (RSG).

    Besides providing non-hazardous solid waste collection, transfer, and disposal services for commercial, industrial, municipal, and residential customers, RSG operates 73 landfill gas and renewable energy projects consisting of 51 electric plants fueled by landfill gas; 14 medium British thermal unit (BTU) plants providing landfill gas to industrial users; 6 high BTU plants that provide pipeline quality natural gas; and 2 projects that burn landfill gas to evaporate leachate.

    RSG pays a sweet 3.2% dividend based on a share price of $ 28 or less. Their balance sheet and income statement proportionately looks similar to WM.

    Yet their quarterly earnings growth (year-over-year) is currently at a remarkable plus 44%. And their operating margin is approaching 20%.

    WM and RSG could be considered “garbage” by some income investors, but in fact when purchased during market corrections and towards their 52-week lows, both are compelling “growth-with-income” companies.

    A Big Opportunity to Invest with Eric Sprott and Sprott Resource Corporation

    Speaking about energy investments, it’s not every day you get a “ground floor” chance to invest along-side of one of the most successful natural resource investment firms in North America.

    That’s in essence what you’re doing if you own shares of Galleon Energy (soon to be known as “Guide Exploration LTD.)

    Galleon Energy (GLNYF.PK), which currently trades for less than U.S. $ 3 per share, is an intermediate oil and natural gas company positioned for long-term growth in Western Canada.

    Galleon Energy also happens to have approximately 15% of its voting shares owned by Sprott Resource Corp. (SCPZF.PK).

    Sprott Resource is a company I suggest you acquaint yourself with.

    In their own words, “Sprott Resource Corp. invests and operates through its subsidiaries in the natural resource sector. We currently have investments and operations in oil and gas, agriculture and agricultural nutrients as well as a large position in physical gold bullion.”

    “We take an active involvement in the companies in which we invest. We are dedicated to generating consistently superior returns on capital for our shareholders, while focusing on risk management and real wealth preservation.”

    “We seek to accomplish these objectives by acquiring or starting attractive businesses at the right time, growing the value organically or through accretive acquisitions and by maintaining financial flexibility to be responsive to the needs of our businesses and to capitalize on new opportunities.”

    You can read more about Galleon Energy here.

    Here’s the recent news release on the decision to change the name Galleon Energy to Guide Exploration Ltd.

    Disclosure: I am long GLNYF.PK, SCPZF.PK.

    Yahoo! Finance: Waste Management Industry News

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