Meet the Monster Stock That Continues to Crush the Market — Even Outperforming Top Stocks Such as Tesla, MicroStrategy, and Amazon

Buying shares of Tesla, Strategy (formerly known as MicroStrategy), and Amazon at the beginning of 2015 would have been one of the greatest decisions any investor could have ever made. A $10,000 investment in each of these companies would now be worth over $150,000, $147,000, and $124,000, respectively. In other words, this simple three-stock portfolio would have gone from $30,000 to over $420,000 in just a little over 10 years.

However, there was a one-stock portfolio that outperformed this three-stock portfolio during this time. If you invested $10,000 in shares of Casella Waste Systems (CWST 1.07%), you’d have $269,000 today.

Not only is Casella stock up nearly 2,600% in the last 10 years, it’s also up 123% over the past five years and up 16% in the past year. This little-known stock just continues to crush the market.

And to be clear, Casella is a little-known stock. Just consider how it’s covered professionally. There are dozens of prominent analysts providing regular commentary for top stocks such as Tesla, Strategy, and Amazon. But among the analysts tracked by TipRanks, only five have recently weighed in on Casella.

Given its track record of crushing the market and its ongoing ability to fly under the radar, Casella Waste Systems is a company that I couldn’t resist digging deeper.

How Casella Waste Systems makes money

For investors familiar with WM (formerly known as Waste Management), Casella is a straightforward business. It provides residential and commercial garbage services, picking it up, transferring it to landfills, recycling it, and more. The company operates in 10 adjacent states, five of which are in the New England region.

In 2024, Casella generated revenue of $962 million by collecting trash, which was up 35% year over year. This segment accounted for 62% of its total revenue, which makes this the biggest part of the business. But take this growth rate with a grain of salt, because the company made eight acquisitions in 2024.

Indeed, mergers and acquisitions are a main component of Casella’s growth strategy. After all, this kind of business has a limited customer base in established markets. It can also only grow so much by raising prices. And every market in the country already has a trash solution.

However, trash collection is an excellent business because it’s largely recession-resilient — communities continue to create garbage regardless of economic conditions. Moreover, this business is usually resistant to competition within the areas that it operates.

Companies that own landfills also have a competitive moat because it’s a regulated space, and new sites are hard to come by. WM owns 262 landfill sites as of the end of 2024, making it the largest player in the country.

For its part, Casella only has eight landfills — significantly smaller. But there are relatively few landfills in the company’s territory, with much of the trash needing to be shipped out of state. It makes the eight landfills that it does have quite valuable. And it means that Casella is able to regularly raise prices.

Is Casella Waste Systems stock a buy?

For the sake of brevity, I believe that Casella Waste Systems stock could be a good investment if it continues to grow, profits improve, and shares can be purchased at an attractive valuation. I’ll consider each point in turn.

Casella’s existing revenue stream is predictable, since it signs long-term contracts in its service areas. It can achieve low-single-digit growth with ongoing price increases. But the greatest growth potential would come from acquisitions.

Over the past three years, Casella has acquired 29 companies for $1.4 billion. While it’s usually a good idea to be skeptical of the growth-by-acquisition strategy, it can be a good idea here. For starters, these businesses tend to sell for far more reasonable prices than flashier tech stocks. Moreover, by acquiring similar businesses in adjacent regions, Casella can get more efficient and improve profitability.

I would expect more acquisitions from Casella in 2025 and beyond. And it could be a good thing if profits improve as well. Moreover, the company does have other margin-accretive works in progress, such as upgrading facilities.

Therefore, Casella can grow its top and bottom line long term, even if gains are modest. To the third consideration, the stock is trading at a slightly higher-than-normal valuation, as the chart shows.

CWST EV to EBITDA data by YCharts

Being a slower-growth company, I believe that investors should be mindful about the valuation of Casella stock. I would think that roughly a 15% pullback would bring shares to more attractive levels.

This could actually be good news for investors today. The S&P 500 (^GSPC -1.39%) is suddenly approaching correction territory. During times of market panic, incredibly stable, reliable businesses such as Casella often go on sale. This stock has pulled back 20% in previous market corrections, and I wouldn’t be surprised if it happened again.

Casella Waste Systems stock has an incredible track record of market-crushing returns. These are the kinds of companies that can be especially good buys when they go on sale. And a sale could be right around the corner.