Clean Harbors Update

On February 9, 2012, we posted Edson Gould’s Speed Resistance Lines (SRL) for Clean Harbors (CLH) with the downside risk for the stock.  At the time, the downside targets were:

  • $43.53 (conservative downside target)
  • $31.00 (mid range)
  • $22.53 (extreme downside target)

Since that time, we’ve revised the downside targets to reflect the following minor changes.

  • $43.97 (conservative downside target)
  • $33.70 (mid range)
  • $23.43 (extreme downside target)

A visual of the downside targets reveals the value of Gould’s SRL.

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So far, CLH has adhered to the SRL that was initially outlined in 2012.  If we consider the period of 2007 to 2009, when the stock fell as low as $20.54 and extend that same decline to the current period, then CLH could decline as low as $41.40.  This assumption is predicated on the stock market not experiencing a precipitous decline from the current level.  A broad market decline would easily bring CLH to the ascending $23.43 level in the SRL. 

While the fundamentals are not glowing for CLH as it goes through the process of spinning off its oil and gas services unit, which could “…take more than a year for the spinoff to be completed…”, there are expectations that the current actions will refocus the company.

Speculators, those willing to accept the downside risk of –36%, could purchase CLH with 25% of intended funds at $45.10 and $41.40.  The final purchase would be at $31.00 or below.  Investors, those willing to hold for 5 years or more, would want to re-assess CLH at $34 and below.

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