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Recession Stocks: Investing in “one man’s trash”

Posted February 20, 2008

"Over the last five years, the company has averaged revenue growth of 21 percent and return on equity of 24 percent. But despite its positive performance, Wall Street has yet to warm up to the stock. There are almost a million shares sold short, and it trades just over 100,000 shares per day." — Rick Pendergraft

by Rick Pendergraft, Early to Rise

Baltimore – (TFN):  The jury is still out on whether or not we are entering a recession. But I have a stock for you in an industry that doesn't rely on a strong economy. The stock has performed well over the last five years, and the sentiment toward it is bearish.

I am talking about American Ecology (ECOL: NASDAQ). The company is in the hazardous waste management industry. Even in a recession, hazardous waste will be produced and have to be disposed of responsibly. In addition, the environment is a hot button right now. As legislators cater to their constituents and push for tougher environmental controls, more and more companies will need American Ecology's services.

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Over the last five years, the company has averaged revenue growth of 21 percent and return on equity of 24 percent. But despite its positive performance, Wall Street has yet to warm up to the stock. There are almost a million shares sold short, and it trades just over 100,000 shares per day. This gives American Ecology a substantial short interest ratio, which could create additional buying pressure as the stock rises.

If you are looking to invest in a stock that should perform well regardless of what happens to the economy, American Ecology fits the bill. Read on for more from Rick Pendergraft at Early to Rise.

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