In short: Ave Maria Funds: cited twice over — as a holding and as a third-party validation of another position. GFL "announced its intention to acquire Secure Waste Infrastructure," a produced-water disposal business in Western Canada, and "a key tenet of the investment thesis for Secure is that its business attributes are akin to that of municipal waste companies. Consequently, Secure should be valued like a municipal waste company instead of a lower valued energy services firm. GFL's plan to acquire Secure validates the thesis" — and, they add, should also lift their WaterBridge Infrastructure position. GFL itself is "the fourth largest waste services company in North America," with "competitive advantages from route density, founder operated, and acyclical," and a "growth-by-acquisition strategy [that] allows it to grow faster than its larger competitors, which struggle to find acquisition targets large enough to move the needle."
GFL is the fourth-largest waste company in North America. Ave Maria like it for the classic reasons in that industry: routes get cheaper per stop the more customers you have on them, the founder still runs it, and rubbish collection does not stop in a recession.
Its particular advantage is size. GFL is big enough to be efficient but small enough that buying a mid-sized regional operator still moves its numbers — something the industry giants cannot say, since no available target is large enough to matter to them.
The reason it appears in this letter, though, is as evidence for a different position. GFL agreed to buy Secure Waste Infrastructure, which disposes of water produced by oil wells in western Canada. Ave Maria's argument had been that such a business should be valued like a waste company rather than an oilfield-services company — and a waste company paying up for it proves the point, which should also help their stake in a similar private business.
Full passage: premium transcript (PDF).
In short: "The market's wrong" on the Secure Waste sell-off — a brilliant fit if Canadian hydrocarbons are set for a renaissance. A "HALO" (hard-asset, low-obsolescence) business: landfills are "beachfront property," inflation-indexed pricing, AI-proof — at its lowest valuations ever, "a moment to buy."
GFL is a waste-collection and landfill company. Its stock sold off after it bought Secure Waste, which pushes it further into handling industrial waste for the energy sector — and he thinks the market got that wrong.
He calls it a "HALO" business: a Hard Asset that's Low-Obsolescence. Landfills are like "beachfront property" because you can't get permits to build new ones anywhere; its prices rise with inflation; and a garbage business can't be disrupted by AI. With the shares at their cheapest levels ever, he sees a buying moment — especially if Canadian oil is heading for a comeback, which would help the new business.
49:05waste which gets it into industrial waste particularly for the energy sector It seems like the market did not like that deal do you feel the same way I think the market's wrong if you believe what I believe that the Canadian oil industry and hydrocarbon industry in general is set for a renaissance because we have to fill that gap of lost shale supply this is actually going to be a brilliant acquisition for them and it's a wonderful business I mean it's a business if you think about it you know there's this term going around the halo
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