Stericycle (SRCL) alone operates globally and generates close to $2 billion in annual revenues. Despite Stericycle's strong business performance during the recently reported quarter, the stock detracted from performance, partially driven by headlines of rumored regulatory action related to one of the Company's incinerators. We believe the issue is not meaningful to results and we would be willing to add to shares on pullbacks related to this. Stericycle's stock trades in the mid to high-”teens EBITDA range, but the company routinely purchases smaller competitors for just 3X-”6X EBITDA. This accretion is a byproduct of Stericycle's competitive positioning and we believe it paves a multi-”year runway for double-”digit growth.
From David Rolfe (Trades, Portfolio)'s Wedgewood Partners first quarter 2014 commentary.
