What Makes Casella Waste Systems’ (CWST) Business Model Consistent?

Soumya Eswaran

Tue, Apr 29, 2025, 8:17 AM 3 min read

Conestoga Capital Advisors, an asset management company, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets started the year with a rally due to optimism about a strong economy and expectations of moderating inflation and lower interest rates. However, concerns over slowing earnings from major Technology companies, geopolitical tensions, and an upcoming announcement on tariffs led to a sharp decline in equities by the end of the first quarter. Investors sought safety, driving U.S. Treasury yields down. The Conestoga Small Cap Composite returned -11.35% (net) in the first quarter compared to the Russell 2000 Growth Index’s -11.12% return. The Conestoga SMid Cap Composite returned -5.73% compared to the Russell 2500 Growth Index’s -10.80% return. The Conestoga Micro-Cap Composite returned -8.24% vs the Russell Microcap Growth Index’s return of -17.75%. Finally, the Conestoga Mid Cap Composite returned 0.96% (net), compared to the Russell Midcap Growth Index’s -7.12% return. Please check the top 5 holdings of the fund for a better understanding of their best picks for 2025.

In its first-quarter 2025 investor letter, Conestoga Capital Advisors highlighted stocks such as Casella Waste Systems, Inc. (NASDAQ:CWST). Casella Waste Systems, Inc. (NASDAQ:CWST) is a vertically integrated solid waste services company. One-month return of Casella Waste Systems, Inc. (NASDAQ:CWST) was 4.19%, and its shares gained 27.92% of their value over the last 52 weeks. On April 28, 2025, Casella Waste Systems, Inc. (NASDAQ:CWST) stock closed at $116.18 per share with a market capitalization of $7.373 billion.

Conestoga Capital Advisors stated the following regarding Casella Waste Systems, Inc. (NASDAQ:CWST) in its Q1 2025 investor letter:

"Casella Waste Systems, Inc. (NASDAQ:CWST) is one of the largest solid waste services companies in the Northeast, uniquely positioned with excess landfill capacity in a capacity constrained region. CWST, along with most waste management stocks, continued to perform well in the face of economic uncertainty and market volatility given the consistency of its business model."

Aerial shot of a recycling plant and its surrounding environment, highlighting the company's commitment to environmental sustainability.

Casella Waste Systems, Inc. (NASDAQ:CWST) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Casella Waste Systems, Inc. (NASDAQ:CWST) at the end of the fourth quarter, compared to 28 in the third quarter. Casella Waste Systems, Inc.'s (NASDAQ:CWST) fourth quarter revenue was $427.5 million, up $67.9 million or 18.9% year-over-year. While we acknowledge the potential of Casella Waste Systems, Inc. (NASDAQ:CWST) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.