It wasn't sparked by observance of the 20th anniversary of the Woodstock festival. In fact, there hasn't been an ecology day or an earth day proclaimed in years.
Nonetheless, the environmental consciousness of the late 1960s, which led to legislation in the 1970s, is again popular as we move toward the 1990s.It re-emerged during the presidential campaign and lives on in President Bush's plan to strengthen air pollution laws. Recycling, acid rain and hazardous waste are recurring discussion points. Wrangling over the Exxon oil spill helped intensify emotions.
It's believed that a tougher Environmental Protection Agency, headed by close Bush associate William Reilly, means companies will have to spend more to comply with standards.
"Environmental issues have overall support they didn't have, and media exposure is keeping everyone's eye on them," observed Barry Mannis, vice president with Shearson Lehman Hutton Inc.
The investment world has been jockeying to be on the right side of this trend, which could make the environment the growth industry of the coming decade.
The word is out, and stocks of companies that handle waste skyrocketed in the first half of this year. Industry leaders Waste Management and Browning-Ferris Industries saw their stock rise 40 percent, while Chemical Waste Management posted a gain of better than 50 percent.
Fidelity Investments even introduced a mutual fund portfolio that specializes in environmental stocks.
The problem is that the environment is a trickier business than it seems. What the government says and what it does aren't always one and the same.
"The key is that all this publicity must now move to spending," said Mark Sulam, analyst with Kidder, Peabody & Co.
While the largest competitors in solid waste (a nice way of saying garbage) and hazardous waste have been fine investments, a flood of smaller competitors have entered this field and issued stock. Many have been real dogs, thanks to poor management, cut-throat competition or lack of demand for services.
Due to the volatile nature of these stocks, an investor should buy only those with strong bottom line and management. Because they provide a more stable service with constant demand, solid waste companies are less volatile than hazardous waste firms.
Keep in mind that consumer demand doesn't dictate the need for their services. "A strong point is that, if we're heading into a weak period economically, they're impervious to economic concerns," said William Genco, first vice president with Merrill Lynch.
Vishnu Swarup, first vice president with Prudential-Bache Securities, believes the second half won't be quite as exciting, but the coming decade "will be a tremendous period of long-term growth."
The big players are clearly defined. In solid waste treatment, biggest-company Waste Management was recommended by all five analysts interviewed for this column.
Second-largest Browning-Ferris Industries was suggested by Merrill, Shearson and Kidder. Wheelbrator Technologies (in which Waste Management has a 20 percent stake) was a favorite of Merrill, Shearson and Chicago Corp., while Atwood PLC was picked by Kidder.
The analysts defended the big companies in regard to persistent negative publicity over price-fixing and other problems. Infractions have occurred due to misguided actions of local managers, aren't dictated by top management and are remedied once they're uncovered, the analysts maintain.
In hazardous waste, Chemical Waste Management (80 percent owned by Waste Management) was recommended by Merrill, Shearson, Kidder and the Chicago Corp. Calgon Carbon and Safety-Kleen were picked by Merrill. EMCON Associates and Harding Associates are favored by Kidder, while Allwaste Inc. was suggested by Prudential-Bache. Meanwhile, Canonie Environmental Services and Groundwater Technology were additional choices of Chicago Corp.