Years ago, right out of college, I worked on a farm and got used to doing lots of dirty work.
Then I met Jeff Bishop and learned how to trade stocks — and my whole life changed.
When you’re scooping poop and baling hay, making your money work for you sounds pretty darn good.
But I credit those early days to much of my success.
Being able to spot unicorns ready for a big liftoff has as much to do with my makeup, my interests, and my background as any of my financial knowledge.
Well, it just so happens that the IPO I have my eyes on today is a waste management company that employs 11,500 people — many of whom aren’t afraid to get their hands a little dirty either.
The company is called Green For Life and plans to list under the ticker symbol GFL.
It’s the fourth largest waste management company in North America, provides services across the U.S. and Canada to 4 million households and 135,000 industrial, commercial and institutional customers.
It plans to launch its IPO after two previously unsuccessful attempts to go public with the desired pricing and conditions — but if I’m anticipating correctly, the third time’s the charm!
Green for Life provides a diverse array of environmental solutions.
Known for its signature bright green trucks, the company capitalizes on three main categories — solid waste management, liquid waste management, and infrastructure development.
That means they do a whole lot of collecting, excavating, hauling, and processing of materials.
And the best part is that they do it in a way that’s compliant with mounting environmental concerns.
One thing that I like about this company right now is that it occupies a sector that has been relatively unfazed by issues in the overall market.
While the indexes have been getting smashed over coronavirus fears, waste management companies have shown a great start to the year and many investors may look to GFL as a defensive play.
GFL may have backed off from an earlier IPO much like WeWork, but January’s successful IPO from Reynolds Consumer Products may also bolster the company’s investor confidence.
GFL’s Financial Terms Have Improved Since Its Previous IPO Attempt
The financial terms of the GFL IPO have grown more attractive since their last attempt to go public.
GFL plans to raise $1.5 billion by offering 73.2 million shares and launch its IPO at a range of $20 to $21.
Those statistics are down from plans in their previously attempted IPO last year, in which they hoped to raise $1.9 billion by offering 87.6 million shares between $20 to $24.
Much of the previous investor concerns about GFL involved its debt load.
But while the company has racked up a whopping $7.6 billion in debt, it’s all a result of their extremely aggressive recent acquisitions that could really drive revenue over the long term.
Since founding the company in 2007, Chief Executive Officer Patrick Dovigi has made more than 100 acquisitions and the largest one was a $2.8 billion acquisitions of Waste Management Industries USA inc. in 2018.
The company has yet to turn a profit yet, but the fact that GFL has expanded into the U.S. could really stirr up interest from American investors when the stock gets listed on the New York Stock Exchange (NYSE) in addition to Toronto Stock Exchange (TSX).
While many investors were concerned about the debt load and growth prospects, the company has taken steps to raise new capital to fund many of its newest acquisitions.
Between January and February, the company collected $264.7 million in new equity from existing investors.
For the most part, I will remain patient before I trade any IPOs due to the market environment right now. Sure, waste management stocks have been hot, but you never know when the tides could turn.
Now, I’m going to be focused on the pricing range very closely.
If GFL prices above $21, it’s an indication there is a demand for the stock and it could be a hot IPO. On the other hand, if we see weak demand, the underwriters could price below $20… and that would be a dud.
Whatever the case may be, I’ll be sure to let my clients know about my moves and thoughts on other hot IPO stocks.