- Republic Services (RSG) is trading above all daily moving averages and has a Trend Seeker “buy” signal.
- Analysts and advisory services are bullish, and the stock has multiple “Strong Buy” ratings.
- RSG might be a good candidate for a core position in your portfolio.
Today’s Featured Stock:
Valued at $76.1 billion, Phoenix-based Republic Services offers environmental services in the U.S. and Canada. The company collects and processes recyclable waste, provides residential recycling services, and also processes and sells used materials like corrugated containers, newsprint, aluminum, and glass. The company is a component of the broad-based S&P 500 Index ($SPX).
What I’m Watching:
I found today’s Chart of the Day by using Barchart’s powerful screening functions. I sorted for stocks with the highest technical buy signals, superior current momentum in both strength and direction, and a Trend Seeker “buy” signal. I then used Barchart’s Flipchart feature to review the charts for consistent price appreciation. RSG checks those boxes. Since the Trend Seeker signaled a “buy” on Jan. 16, the stock has gained 15.52%.
On the chart, you can note that the stock is trading above all of its daily moving averages and has rising prices on rising volume.
Barchart Technical Indicators for RSG Stock:
Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.
When a stock is trading above all of its daily moving averages and closed within less than 1% of its 52-week high, it won’t take much to hit another new high
- Republic Services has a 100% technical “buy” signal.
- The stock closed at $244.82 on April 2, within 0.07% of its 52-week high of $245.
- RSG has a weighted alpha of +34.26
- The stock has gained 29.59% over the past year.
- Trend Seeker “buy” signal intact.
- RSG is trading above its 20-, 50- and 100-day moving averages.
- The stock has made 6 new highs and is up 3.29% in the last month.
- The 14-day Relative Strength Index is at 71.06%
- The technical support level at $241.77.
Follow the Fundamentals:
Note the projected increases in both revenue and earnings.
- Trailing price/earnings (P/E) ratio of 37.54x.
- Forward dividend yield of 0.95%.
- Revenue is expected to grow 5.41% this year and another 5.16% next year.
- Earnings are estimated to increase 6.38% this year and increase again by 10.26% next year.
Analyst and Investor Sentiment on Republic Services:
I don’t buy stocks because everyone else is buying, but I do realize that if major firms and investors are dumping a stock, it’s hard to make money swimming against the tide.
It looks like not only Wall Street analysts, but also many of the popular investing advisory services, are bullish on this stock.
- Wall Street analysts issued 11 “Strong Buy,” 2 “Buy,” and 7 “Hold” opinions on the stock with price targets between $176 and $279.
- Value Line gives the stock its highest rating and comments: “Is waste hauler Republic Services the perfect stock? Well, for starters, it’s ranked Highest (1) for both Timeliness and Safety. Its Financial Strength rating is an A. The shares also score perfect 100s for all three categories of Earnings Predictability, Price Growth Persistence, and Price Stability. I am not sure that you will find another similarly near-perfectly rated company in all of the 1,500 stocks reviewed in the Value Line Investment Survey. Its business is relatively insulated from economic swings.”
- CFRA’s MarketScope gives the stock a “Buy” rating and comments: “We view RSG as well positioned to benefit from stable volumes and favorable pricing trends as its market share expands via M&A. The environmental solutions industry remains fragmented, with ample opportunity for RSG to build scale and its revenue base via market consolidation.”
- MorningStar thinks the stock is 38% overvalued mainly because its recent price has driven up the P/E and comments: “Republic’s traditional solid waste operations should continue to perform well due to solid execution and strong pricing. Significant investments are planned for renewable energy generation and recycling projects. These projects should support stronger earnings and free cash flow growth and raise the firm’s already strong ESG profile. Republic enjoys robust competitive advantages rooted in intangible assets (regulatory permits for landfills) and cost advantages (route density).”
- Of the 1,272 investors following the stock on Motley Fool, 1,208 investors think the stock will beat the market while 64 think it won’t
- 19,200 investors monitor the stock on Seeking Alpha, which rates the stock a “Hold.”
The Bottom Line:
All in all, this is a stock that seems to be perfect to acquire and hold as a core position.
Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance and reevaluate your stop losses at least on a weekly basis.
