Wedbush Morgan gave the Waste Management industry some good news as it announced an upgrade on one of its stocks.

Perma-Fix Environmental Services Inc. (PESI) [Chart - News - Analysis] was upgraded from Neutral » Outperform on 11/9/2009---a positive sign for the stock that investors typically welcome. FYI, Wedbush Morgan uses the following rating scale when analyzing stocks: Outperform, Neutral, Underperform.

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Perma-Fix Environmental Services Inc. has an average analyst recommendation score of 2.0 and competes for investment dollars with Waste Management, Inc. (WM) [Chart - News - Analysis] and Republic Services Inc. (RSG) [Chart - News - Analysis]---two other stocks in the Waste Management industry that have average analyst recommendation scores of 2.2 and 2.0 respectively.

Analyst recommendations are averaged and scored using the following rating scale:

- 1.0 = Strong Buy

- 2.0 = Buy

- 3.0 = Hold

- 4.0 = Sell

- 5.0 = Strong Sell

Why are Upgrades and Initiations Good and Downgrades Bad?

One event that is almost certain to get a reaction from Wall Street is an analyst upgrade or downgrade. Everyone is looking for an edge in the stock market, and quite often, traders turn to stock analysts to get that edge.

Upgrades and coverage initiations are typically good for stocks because they show that analysts either believe that the stock is going to perform better in the future or that the stock is worth covering and providing analysis on.

Downgrades are typically bad for stocks because they show that analysts believe that the stock is going to perform worse in the future.

What is a Stock Analyst?

Check out the Understanding Stock Analyst Research and Recommendations video and article for more info.

A stock analysts is a person---typically employed by a large bank, investment firm or analysis company---who devotes his/her life to learning and making predictions about a company and its future performance.

Stock analysts sift through company reports and filings, talk to company management, probe customers and competitors and basically do whatever they can to find out if a company is healthy and growing or sick and shrinking. Because this is incredibly demanding work, stock analysts typically only monitor one or two companies at a time.

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Analysts were expecting Republic Services Inc. (RSG) [Chart - News - Analysis] to report earnings of $0.36 for last quarter, but RSG beat expectations with actual earnings of $0.39---3 cents above the consensus estimate. RSG also issued earnings guidance for next quarter that is in line with current analyst expectations.

If you compare last quarter's earnings to the $0.48 the company made per share during the same quarter a year ago, you can see that RSG’s earnings are down this year.

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Also, if you compare RSG's 12.50% projected earnings-per-share (EPS) growth rate for the next five years with the projected EPS growth rate of 12.76% for the Waste Management industry as a whole during that same time frame, you can see that analysts expect RSG to underperform the industry in the future---which is a bad sign for the stock.

Drilling down a little deeper into the Waste Management industry, you can see how analysts believe RSG will stack up against some of the other stocks in the industry, like Waste Management, Inc. (WM) [Chart - News - Analysis] and Stericycle Inc. (SRCL) [Chart - News - Analysis], in the future. Analysts believe WM's earnings are going to grow at a rate of 10.33% while SRCL's earnings are going to grow at a rate of 18.75%.

Earnings season can be a volatile time in the stock market. Check out these videos and articles to be better prepared to take advantage of the large price moves that tend to accompany earnings announcements.

- Earnings Season is Here - Find Out How to Trade It

- Using Options to Trade Earnings

- Understanding Stock Analyst Research and Recommendations

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Analysts were expecting WCA Waste Corporation (WCAA) [Chart - News - Analysis] to report earnings of $0.03 for last quarter, but WCAA missed expectations with actual earnings of $0.02---1 cent below the consensus estimate.

If you compare last quarter's earnings to the $-0.02 the company made per share during the same quarter a year ago, you can see that WCAA’s earnings are up this year.

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Also, if you compare WCAA's 0.00% projected earnings-per-share (EPS) growth rate for the next five years with the projected EPS growth rate of 12.75% for the Waste Management industry as a whole during that same time frame, you can see that analysts expect WCAA to underperform the industry in the future---which is a bad sign for the stock.

Drilling down a little deeper into the Waste Management industry, you can see how analysts believe WCAA will stack up against some of the other stocks in the industry, like Waste Management, Inc. (WM) [Chart - News - Analysis] and Republic Services Inc. (RSG) [Chart - News - Analysis], in the future. Analysts believe WM's earnings are going to grow at a rate of 10.33% while RSG's earnings are going to grow at a rate of 12.50%.

Earnings season can be a volatile time in the stock market. Check out these videos and articles to be better prepared to take advantage of the large price moves that tend to accompany earnings announcements.

- Earnings Season is Here - Find Out How to Trade It

- Using Options to Trade Earnings

- Understanding Stock Analyst Research and Recommendations

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