Clean Harbors Inc. is scored 82 for moat and 65 for management. The management score rests on a return on invested capital of 7.5% and a gross margin of 29.5% — figures that describe a business earning a respectable return on what it employs. Debt sits at 1.26x equity. A wide moat alongside strong management is a combination worth understanding before the price matters at all.
The price anchors are built on deliberately conservative assumptions. Growth is modelled at 13.9% a year, the rate measured from the filings. The exit multiple assumed is 27.8x. That produces an intrinsic value of $208.54, a 10-CAP price of $61.77 and a payback time price of $92.82, with the value zone set at the highest of the three, $104.27. Today's price of $312.51 is 200% above it.
A wonderful business at the wrong price is still the wrong price. Clean Harbors Inc. scores well on the business and poorly on the entry point, which is the most common shape in a long bull market.
| Price | $312.51 |
| Market cap | $16.5B |
| P/E ratio | 37.9x |
| Return on invested capital | 7.5% |
| Gross margin | 29.5% |
| Debt to equity | 1.26x |
| Free cash flow yield | 3.5% |
| Growth rate used | 13.9% |
| Growth rate measured | 14.0% |
| Exit multiple assumed | 27.8x |
| Company | Moat | Buy price |
| Equifax (EFX) | 65 | $121.35 |
| Rbc Bearings Inc (RBC) | 94 | $204.02 |
| IDEX Corporation (IEX) | 54 | $102.87 |
| Cnh Industrial Nv (CNH) | 41 | $11.03 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Clean Harbors Inc. rather than accepting ours.