Should you invest in garbage truck companies? Karen Firestone says yes
- Waste Connections should do well as commercial spaces get back to business as usual.
- Booz Allen is in focus due to Biden administration’s increased focus on cybersecurity.
- American Express has a big runway ahead with leisure and business travel picking up.
Karen Firestone of Aureus Asset Management was on CNBC to discuss some of her picks which included a waste management company and some other stocks.
Waste Connections has pricing power
Waste Connections Inc (NYSE: WCN) suffered last year due to people not going to offices, which left the majority of commercial spaces closed during that period. Shares of the firm are up around 12% year-to-date as well as for the trailing one year period. In comparison, S&P 500 is up 13% year-to-date and around 39% over the last one year.
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On why the waste management company should do well this year, Firestone said:
“This year people are coming back into offices and you are going to see price increases across the scale. They have pricing power in the trash business.”
Other stocks that are expected to do well
She also talked about Booz Allen Hamilton Holding Corporation (NYSE: BAH), one of the major defense contractors. The firm does a lot of work in the cybersecurity space and is a leader in artificial intelligence applications. With the Biden administration’s heightened focus on cybersecurity amid the ransomware attack on Colonial pipeline, the company should do well. The company’s stock is relatively flat year-to-date.
Re/Max Holdings Inc (NYSE: RMAX) is another stock that she is positive about. Re/Max is the largest real estate brokerage company in the U.S. and has expanded into mortgage banking as well. They sell in the mid-tier range, which typically sees a lot of volume. But the volume has been limited as the housing supply remains tight. She expects the Re/Max business to do well as the prices cool down and a lot more supply comes on to the market.
She went into the merits of why she bought American Express Company (NYSE: AXP) a few months back. At the time, it looked like a reopening play and was available at a discount to the S&P 500. There was hardly any leisure or business travel over the last year. According to her, American Express really starts to prosper when people begin to travel particularly overseas. She sees a big runway ahead for the stock with business and leisure travel picking up in the coming months.