June 16. 2008 - Clean Harbors Inc. (CLHB-NASDAQ) is one of North America's leading hazardous waste management companies and does more than its name suggests. Clean Harbors' technical services, which account for most of the company's sales, encompass the collection, transportation, treatment, and disposal of hazardous waste, including chemical and laboratory waste but not nuclear waste. The company's 49 waste management facilities includes nine landfills, six incineration locations, and six wastewater treatment centers. Among Clean Harbors' 45,000-plus customers are commercial and industrial companies, educational and research organizations, and health care providers.

Earnings have been the fuel for this rocket, averaging growth of 37% a year over the last 5 years, going from $1.45 in 2005 to $2.53 in 2006. Last year, they were down a little to $2.15, but this year look for $2.58, next year, $3.07. Over the next 5 years, projections are for growth of 15% a year, on average. Next earnings release date is August 4 with expectations of 67 cents for the quarter ended in June. On the sales side, the last 5 years showed increases of 15% a year, on average. Analysts see about 6% a year, on average, for the next 5.

The first quarter of this year was a nice surprise with sales stronger than expected and earnings more than doubling the first quarter of last year (43 cents a share vs. 17 cents). Driving the higher revenues was strong demand in the Site Services and Technical Services groups. Within those, three industries stood out: pharmaceutical, refineries, and chemicals. Over 90% of the company's incinerator capacity was used in the quarter in the U.S. and Canada. Increases in landfill volume climbed higher by 40% in the quarter as well with no indication of either incinerator or landfill demand weakening.

Recently Clean Harbors bought a California competitor, Universal Environmental, Inc. That will help Clean Harbor gain market share in the lucrative and growing West Coast market while eliminating one competitor. Furthermore, it can offer other services provided by the Technical group to Universal's existing client base.

One other element that should almost guarantee better profits: price hikes and surcharges to balance the increased fuel costs and other raw materials expenses.

Numbers: Alan McKim, the company's chairman and CEO, controls 15% of Clean Harbors. Market cap is $1.8 billion on 23.328 million shares. Debt is 36% of the balance sheet. Book Value in 2008 should be $19.90. Net profit margin was 4.7% last year with expectations of 5.3% this year and 5.8% next year. Current asset are more than 1.5 times current liabilities with almost $100 million in cash. There is no dividend. Return on Equity is very high at 22%. Analysts think it will decrease to 12% this year and 12.5% next year.

Clean Harbors is cleaning up, delivering debris to dumps and profits to shareholders. The only problem is that investors already believe strongly and have bid up these shares to all-time highs along with a P/E (price to earnings ratio) of 31. Unless there are positive surprises above analysts' estimates, it's hard to see this stock going too much further ahead. It seems the price is fully reflecting all the good news.

- Company Web site: www.cleanharbors.com

 Ted Allrich