Why Casella Waste Systems (CWST) Stock Is Trading Lower Today

What Happened:

Shares of waste management company Casella (NASDAQ:CWST) fell 6.3% in the afternoon session after the company announced it is pricing an underwritten public offering of 4.5m shares at $100/share. Notably, before the announcement, CWST had more than 58m shares outstanding, which means the stock sale could raise the supply by roughly 8%. This could have a negative impact on its stock price as the increase in the supply of outstanding shares dilutes the ownership of existing shareholders. Additionally, the stock move hints at some market skepticism regarding CWST's capital deployment strategy, which includes funding the acquisitions of Royal Carting and Welsh Sanitation

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Casella Waste Systems? Access our full analysis report here, it’s free.

What is the market telling us:

Casella Waste Systems’s shares are not very volatile than the market average and over the last year have had only 2 moves greater than 5%. In context of that, today’s move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

Casella Waste Systems is up 18.8% since the beginning of the year, and at $100.56 per share it is trading close to its 52-week high of $108.40 from September 2024. Investors who bought $1,000 worth of Casella Waste Systems’s shares 5 years ago would now be looking at an investment worth $2,400.

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