Munro Climate Change Leaders Fund on Clean Harbors Inc.
Thesis
Clean Harbors operates hazardous-waste collection, treatment, incineration and recycled motor-oil businesses protected by difficult-to-obtain permits and environmental approvals. Munro expects US manufacturing reshoring to create additional waste-management demand, citing a new $600 million facility contract. Tightening environmental standards and PFAS remediation are further growth drivers, with management forecasting more than 30% growth in PFAS-related revenue this year. Its dominant incineration position supports pricing power and margin expansion, although the fund acknowledges the shares no longer look as cheap relative to traditional waste peers.
“the growth opportunities remain strong and position Clean Harbors to outperform market earnings expectations.”
Key risks
- Cyclical recycled-oil earnings exposed to oil-price fluctuations
- A less compelling valuation relative to municipal solid-waste competitors
- Reliance on the pace of industrial reshoring and environmental-remediation activity