Cramer’s Trash Play – Republic Services

Cramer told investors that he is bullish on the acquisition of Allied Waste (AW) by Republic Services (RSG). The deal is set to be completed by the fourth-quarter and the combined companies will be the second largest in the garbage disposal industry, behind only Waste Management (WMI). Cramer thinks the takeover will bring out synergies by adding more garbage facilities to routes which will help cut down on travel time and lower energy costs. He noted the costs savings will be large at around $100 million for the first year and $80 million for the two years after. Cramer said the Republic has an 18% long-term growth rate and could rise to $40 a share. He advised investors to wait a week before buying the stock because the shares popped 3% after Goldman Sachs recommended it today. The “Clean Tech” sector is poised to be the biggest gainer in 2008. See what our analysts rank as the #1 opportunity today

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