(11-06-2019, 06:14 AM)crimsonghost747 Wrote: I've been looking at WM too once in a while. But yes, indeed, it has looked way too expensive. PE is currently at 26.47 and div is at 1.83% (data from yahoo) so it doesn't look horribly priced right now. What sort of levels are you guys targeting for those bigger buys?
IMO you have to view this one somewhat like historical JNJ with less of the current JNJ noise. The current WM PE is not cheap but you gotta pay some for the security. They haul trash and that never goes away. That pays the dividend and we won't ever wake up to the threat of bankruptcy. As Divemenow mentions they have other lucrative but unpredictable revenue streams like natural disasters. We don't know what quarter they happen, but we can be sure they will happen. They often make a lot of money with their recyclables BIZ, but they are producing a commodity and now is not one of those times when the commodity prices are up so earnings are down, hence the SP pullback. To answer your question the current SP is probably good long-term, but the chances it goes to 100 or less on the next market pullback is fairly likely. That's when it would become a core position. That is my long-term goal. The static of big pharma isn't going away so this just seems like a very good place to park somewhat defensive money. All that said, valuation always matters in the end and there is still little margin of safety at these SPs if the market gets rough, and we know it will.