Cleanaway – Rallies 10%

Our “high conviction” buy on Cleanaway Waste Management has produced a 10% return in the past week.

Our upside target has been reached and we expect selling pressure building within the $2.30 – $2.40 price range.

What is your strategy?

  1. Take profit now and be happy with the gain
  2. Use a momentum filter and stick with the trade
  3. Long-term investment 2% yield and a good 2 – 3 year outlook

If you’d like to discuss Cleanaway or our other high conviction holdings, please call me on 1300 614 002.

Cleanaway – FY20 Earnings

Despite disruptions from COVID-19 Cleanaway reported an underlying EBITDA of $516m, up 12% on the same time last year.

FY21 EPS growth is forecast to increase by 2 – 3%, placing the stock on a forward yield of 1.8%.

The valuation is looking expensive at 30x earnings, however, the defensive exposure remains attractive in a low yield environment and the balance sheet is in good shape.