Progressive Waste Solutions Ltd. struggling to reverse a downtrend

Aug 17th, 2011 – Comment

There is a caution flag on the track for BIN with a death cross on the chart and an advance fueled by the announcement of a normal course issuer bid.


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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Could I please have your opinion on BIN? It had pulled back about 2 dollars even before the stock market decline. It then went as low as $18.88 and now moving up a little.

Thanks,

 Carol

 

Hi Carol,

Thanks for the assignment. Progressive Waste Management Solutions  (BIN TSX)  is the third largest non hazardous solid waste management company in North America. Whenever I look at the waste management sector I remember a conversation I had with the founder of the Small Hope Bay Resort in the Bahamas. Back in the late 1970′s I had the good fortune to meet Dick Birch who advised that if a young man wanted to make money he would take all the waste people created and find a way to manage it responsibly. Great insight from a great man.

 BIN has positioned itself in a niche market that offers opportunities for growth from continued expansion of demand and focused acquisitions. The charts will provide some answers to your question regarding direction.

 

The three year chart paints the picture of a stock that has breached support  after trading sideways  for the last year. The breakdown started in early July of 2011 as some investors started to look at issues that include changes in management, insider selling, and the probability of a dividend increase. By mid July the shares had broken below the 50 and 200 day moving averages which was like throwing gasoline on a fire.

 

 

The six month chart illustrates the stunning decline that has BIN in its clutches.  It did catch a bounce off of $19.25 and is struggling to climb back over $20.00 where it has support. The RSI and MACD have both made a turn and should be helped by the announced buy back of 4 million shares announced on August 17, 2011.

I am not convinced that BIN is on the verge of reversing the trend just yet. There is a caution flag on the track for BIN with  a death cross on the chart and an advance fueled by the announcement of a normal course issuer bid.  Best to confirm the bottom before committing capital in a downtrend.

Make it a profitable day and happy capitalism!

 

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