April 11, 2019 / 5:57 PM / 7 months ago

BUZZ-Investors dump waste management stocks on Stifel downgrades

** Shares of waste management stocks down after Stifel downgrades Waste Management, Waste Connections, Republic Services and Advanced Disposal Services to “hold” from “buy”

** WM down 2.7%, U.S.-listed shares of WCN 1.7%, RSG 2.8% and ADSW 4%

** Bull analyst Michael Hoffman says lowering ratings to flush out recycling headwinds, but solid waste healthy; Says recycling business has deteriorated more than expected

** Recycled paper prices down $34/ton from the FY18 average into early April and paper accounts for 60-70% of the recycling basket for most cos, which translates into ~$20/ton of headwind, every $10/ton deviation is about $0.03 per share - Hoffman

** Demand is there but new low contamination restrictions in other importing countries (Vietnam, India, Indonesia) are disrupting the flow of goods and paper prices are falling again - Hoffman

** RSG up 7.4% YTD, WM 13%, ADSW ~12% and WCN ~18% compared with a ~16% increase in the Dow Jones U.S. Waste & Services Disposal index (Reporting by Arjun Panchadar in Bengaluru)

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