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News ::
You Can't Judge a "Green" Book Value by its Cover (english)
01 Feb 2003
The high costs of hazardous toxic waste cleanup has cities and industry reeling. Technology may be the answer.
pollution_child.jpg
The high costs of hazardous toxic waste cleanup has cities and industry reeling. Technology may be the answer.

You
Can't Judge a "Green" Book Value by its Cover
By
Freddie Mooche - Axcess
Business News

Pollution regulations have become a double-edged sword. The Environmental
Protection Agency as well as State and Local agencies are attempting
to enforce them while communities and industry shirk its costs.
Massachusetts
ranks near the bottom in the nation for checking on industry's compliance
with environmental laws, especially in minority neighborhoods, according
to a new federal website that for the first time allows the public
to monitor how anti-pollution laws are enforced.
Only
27 percent of facilities holding major environmental permits have
been inspected by state or federal regulators in the past two years,
a rate lower than all but three other states, according to the US
Environmental Protection Agency.
In
Hartford Illinois residents have been having problems with local
oil refineries. The Illinois Environmental Protection Agency, responding
to the latest complaint found benzene in four different levels of
between 10 and 12 parts per billion in effected houses. The release
prompted local reports finding's of the existence of 3.8 million
gallons of gasoline in the local water table.
Dennis
Bedwell, a Hartford resident, summed it up this way, 'I have a daughter
living at home and I'll fight for my family." Mr. Bedwell lives
directly across from Premcor Refinery, who has had more than one
problem in that community. In response to the complaints, the Illinois
Attorney General told Premcor that they had to increase the rate
at which they have been removing this gasoline over the last ten
years. Premcor refused.
A
series of class action suits have been filed against Premcor refinery
by Illinois attorney, Mary Ann Pohl, who says the courts have certified
three classes in an action against Premcor.
In
Pennsylvania, with much fanfare in July 1998, Lehigh, Northampton,
Monroe and Schuylkill counties began the curbside collection of
leftover household paints, solvents, motor oil, pesticides and other
hazardous wastes, offering residents a convenient way to help protect
the environment.
But
after 41/2 years, the popular program has been scrapped, and it
isn't likely to return in the curbside collection format that's
resulted in more than 6,300 pickups over the past two years.
'"We
could not afford to do it at this rate,'" said Lehigh County
Planning Director Robert E. Korp, noting that the county's budget
crunch for 2003 helped kill the program.
Even
the military is feeling the crunch of environmental regulations,
attempting to assuage the White House to give government bases exempt
status.
Within
all these communities one common cry is heard; cost. While costs
run high to remove hazardous waste industry and government are turning
to technology to find ways of not only cleaning up hazardous waste
but also ways to dispose of it. This has spawned a surge in newer
technology applications being deployed by environmental companies.
Cleaning
Up In Green Investments
(environmental stocks, by the numbers)
Axcess
Business News looked at several of these smaller hazardous waste
companies and compared them by the numbers. Our findings were interesting.
The Environmental Services Industry is expected to see 13.9% annual
growth over the next five years, according to Charles Schwab's "Equity
Snapshot Report." MarketWatch had given those figures to be
more like 25.93% according to their Nov 17, 2002 Waste Management
Services Fundamentals. Regardless of whose figures are more accurate,
in either case the consensus is one of double-digit growth over
the next five years.
But
according to comments made to Axcess Business News by a Charles
Schwab representative in their Reno Nevada office, "Schwab
does not provide investor advice" and their reports are purchased
from third-parties. However in the fine print it states, "this
report report may include the Schwab Equity Research Department's
Schwab Equity Rating," Nice try Chuck. Axcess Business News
noted discrepancies in MarketWatch's report as well, leaving the
true figures somewhere in between those estimates.
Axcess
Business News examined three companies, whose links to their individual
write-up can be found below. In looking at these newer technology
driven companies each was classified a Micro Cap Stock, each had
unique stories on their business and the technology they offer.
Clean
Harbor (Nasdaq: CLHB)
provides environmental services to customers in the United States
and Puerto Rico and recently completed the acquisition of Safety-Kleen's
Chemical Services Division (CSD) on September 10, which accounted
for 25% of its revenue. Shares of Clean Harbor have risen sharply
in the last three months while its value to investors fundamentally
has fallen. Shares closed Friday January 24 at $14.18. We noted
that insiders during this time have been selling. Clean Harbor's
52 week high is $17.82. By the numbers, while this company has shown
good growth for its shareholders, at its present levels other opportunities
might fair better. Clean Harbor's insiders must have thought that
as well.
Axcess
Business News added Clean Harbor (CLHB) to its Small Cap Stocks
Guide January 24 in its "worst picks" column and will
be following this stocks performance for our members.
Perma
Fix Enviro Services (NASDAQ: PESI)
treats, stores and disposes of hazardous industrial and commercial
wastes. PESI had recorded an increase in revenue of 39% for 3Q primarily
attributed to its nuclear waste segment. Revenues for the nuclear
segment were $13.5 million for the quarter, reflecting an increase
of 140% over the same quarter of 2001. This increase is principally
a result of the growth in the mixed waste revenues due to the Company's
continued buildup of this new strategic market.
These
favorable results for the nuclear segment were negatively impacted
by the industrial segment which experienced an overall slowing principally
due to the current economic downturn, according to the Company.
Axcess
Business News noted that while PESI has had a good year, its sales
per employee ($149,570) was near the industry average ($186,000),
suggesting its potential to continue showing robust growth could
be curtailed without higher expenditures in its G&A expenses.
We suspect that this could stall future earnings growth and have
a "wait and see" view towards this company. Apparently
Wall Street shares that view as PESI stock price showed little to
no reaction following its November 11, 2002 announcement of improved
earnings.
Environmental
stocks are typically sensitive to news when newer technologies or
applications are involved. PESI closed January 24 at $2.47. Its
52 week is $3.50 which it hasn't seen since April 2002. CBSMarketWatch
columnist, Mark Hulbert, began touting PESI in his column January
15. Hulbert's MarketWatch story discloses that he publishes the
Hulbert Financial Digest that most likely also featured PESI.
Axcess
Business News added PESI to its Small Cap Stock Guide Jan 24 in
its "Best Picks" column and will be following this stocks
performance for our members. While adding it to our column our view
is more wait and see than anything else. While PESI had a good quarter
in its Nuclear segment, we do not expect those kinds of improvements
to continue as rapidly although long-term PESI seems to be a safe
bet, or Green Investment.
KBF
Pollution Management (OTCBB: KBFP)
owns the patented technology for separating toxic and heavy metals
from waste water and hazardous materials. The Company's Selective
Separation Technology boasts the ability to virtually eliminate
hazardous waste. KBFP boasts that it can clean up toxic waste to
the point of eliminating landfills.
Of
the three Micro Cap companies examined, KBFP is no stranger to Axcess
Business News. We had featured it in a top story Nov 25, "Green
or Mean Returns," shortly after adding it to our Small
Cap Stocks Guide "best picks" column on Nov 18. That story
and stock pick selection were prompted by a news
release KBFP had made Nov 14 announcing a 50% increase in sales,
verses PESI's 32% increase. Another company featured in that Nov
25 article, Greenman Technologies, Inc. (AMEX: GRN) was not included
in this story as its core business is recycling tires not hazardous
waste treatment. Greenman Technology had been interviewed in our
Inside Wall Street
column following its listing to the AMEX. Mr. Chuck Coppa, GRN's
CFO was featured in that interview.
Axcess
Business News received lots of queries on KBFP following that Nov
25 news article, prompting us to interview its President, Mr. Kevin
Kreisler, on the company's recent news and its plans. That interview
appeared in our Spotlight column, hosted by Armando Duke, December
9, 2002.
KBFP
had climbed from $0.05 on Nov 18 to close on Jan 24 at $0.06. Shares
had traded over $0.07 before settling back on Jan 24. Like PESI,
KBF Pollution Management Inc had a great 3Q but unlike PESI its
stock price reacted positively to its news. In addition, the Company's
sales per employee was only $82,000 verses an industry average of
$186,000. Axcess Business News believes this to be a positive figure
for KBFP and suggests that its improvements are likely to continue
unhindered by personnel constraints that would otherwise push up
costs parallel to growth. KBFP remains in our Small Cap Stock Guide
"best picks" column and is viewed to be "very positive"
in expectations of continued improved revenue and earnings.
Of
note was a letter of intent KBFP had announced on Dec
19, 200l to acquire Jones & Co., a Connecticut based hazardous
waste business. Axcess Business News believes KBFP may be positioning
itself to far outperform its peers should that acquisition be completed.
The company had made significant plant expansions in 2002 in anticipation
of that acquisition being completed.
To
view these companies individual numbers, click on any of the links
below.


Clean
Harbors (NASDAQ: CLHB)
KBF
Pollution Mgt. (OTCBB: KBFP)


Perma
Fix Enviro (NASDAQ: PESI)
 


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