Waste Management Outlook - Mixed Signals and a Weak Technical Picture

Market Snapshot

Waste Management (WM) is in a tricky position, with bearish technical indicators overpowering bullish ones and an internal diagnostic score of just 2.36 (0-10). While analysts are generally optimistic, the price has recently fallen by 1.82%, creating a mismatch between sentiment and performance.

News Highlights

• U.S. Vaccine Policy Shifts: Recent changes in how the U.S. Department of Health and Human Services approves and recommends vaccines could have indirect effects on the waste management sector, particularly in handling medical waste. The shift in focus may influence regulatory scrutiny or infrastructure demand.
• China’s Manufacturing Activity: China’s factory activity, measured by the PMI index, showed a slight improvement in May, rising to 49.5 from 49.0 in April. While still below the 50 threshold for expansion, the data suggests stabilizing demand that could indirectly support global waste and recycling operations.
• U.S. Export Restrictions: The U.S. is reported to be tightening export rules on key software companies like Cadence and Synopsys, which could have ripple effects on supply chains and indirectly affect sectors like waste management through broader economic uncertainty.

Analyst Views & Fundamentals

Analysts remain cautiously optimistic, with a simple average rating of 3.80 and a performance-weighted rating of 5.34. Despite this, ratings are inconsistent, with a mix of Strong Buy, Buy, and Neutral calls. This divergence suggests uncertainty in the sector, and the price fall of 1.82% highlights the current mismatch between expectations and performance.

Fundamental Highlights

• ROE (Return on Equity): 7.90% (Internal diagnostic score: 3)
• ROA (Return on Assets): 1.59% (Internal diagnostic score: 3)
• Net Profit Margin: 10.96% (Internal diagnostic score: 3)
• Operating Revenue Growth: 17.87% YoY (Internal diagnostic score: 2)
• Non-current Liabilities / Total Liabilities: 84.07% (Internal diagnostic score: 2)
• Interest Coverage Ratio: 4.6983x (Internal diagnostic score: 3)

Money-Flow Trends

Big money is moving cautiously, with overall fund flow trends showing a negative pattern. The large and extra-large money flows are negative, indicating institutional or high-net-worth investors are pulling back. However, retail (small) investors are showing a positive trend, suggesting retail participation is still bullish. The overall inflow ratio is at 46.03%, with big money at 45.61%, indicating that while there is some inflow, it’s not enough to reverse the bearish momentum.

Key Technical Signals

Technically, Waste Management is in a weak state. The internal diagnostic score is 2.36 (0-10), and the key indicators are tilted strongly against the stock:

• WR Oversold: 3.1 (internal diagnostic score); seen 40 times historically with a 50.0% win rate and an average return of 1.90%.
• Marubozu White: 2.99 (internal diagnostic score); seen 13 times historically with a 46.15% win rate and an average return of 0.01%.
• RSI Oversold: 1.00 (internal diagnostic score); seen 16 times historically with a 25.0% win rate and an average return of -6.50%.

Recently, WR Oversold and RSI Oversold have appeared multiple times in the past 5 days, including on September 10, September 8, and September 5. This repeated bearish signal suggests the stock is struggling to regain strength. The key insight is clear: the trend is weak, and bearish indicators dominate (3 bearish vs. 0 bullish).

Conclusion

With weak technicals, divergent analyst ratings, and mixed money flows, Waste Management remains a stock to approach with caution. While fundamentals like revenue growth and return metrics are positive, the current price drop and bearish momentum suggest it’s best to wait for a clearer trend or improved technical structure before committing capital.