Casella Waste Systems is a waste management company based in Vermont. It offers recycling, landfill, energy, organics, collection, and special waste services to residential, commercial, municipal, and industrial customers in the northeast region of the US. The vertically integrated nature of Casella’s business and its focus on secondary and tertiary markets offers the company economies of scale. This moat is critical in the waste management industry that is commoditized and highly competitive. Additionally, building new landfills is not easy, and the pricing for existing landfills that Casella operates has the potential to grow. The long-term growth prospects of Casella Waste Systems are bright.
The Long term monthly chart for Casella Waste shows a strong uptrend that began around 2016. Since then, the price has gone up almost 8X. Throughout the uptrend, the price appears to have respected the bottom of the long-term trend, with a couple of exceptions in January 2019 and the March 2020 crash. However, on both those occasions, the price has bounced back up above the trend line and has continued making higher highs and higher lows. The most recent pullback saw the price drop 10% from a peak of $70. Prices have found support at the $63 level, which was previously a resistance zone. A long position with a tight stop loss below the bottom trend line at $61 can be initiated. The target price is above $70.
Position entered into our long-term tracking portfolio today. The entry point is at $63.86, and stop-loss is placed at stop-loss $55.39, which is 15% below the entry point. The short-term to medium-term take profit at the top of the trend is set at $70.25, giving a profit of 10%.