It's easy enough to waste money, but it's getting harder to make money out of waste.

At least judging by the share price of Transpacific Industries, which specialises in waste disposal and recycling. It's been, well, trashed. Those dastardly hedge funds have been blamed for short selling the stock, as they tend to do when they smell blood. Or less metaphorically, when they see too much debt.

Transpacific owes more than the market says it is worth - the result of a buying spree that last year averaged one acquisition a week and has only slowed a little since then with a hostile bid that's just lapsed.

Even so, it has clearly bought well and there would only be a problem if it can't pay the interest bill. Certainly there's nothing wrong with its cash flow. Underlying revenue growth is still above 15 per cent a year thanks to the fact it's in anything dirty it can get its hands on such as industrial cleaning and even recycling used industrial oil known as hydrogenation.

Talk about defensive - there'll always be effluent no matter what the economy does.

Curiously, it also imports MAN trucks and buses.

Although Austock Securities (which has a 12-month share price target of $7.85) estimates the volume of waste rises by 7.5 per cent a year - heck, that's more than the economy is growing - the trouble is Transpacific charges by time.

So as far as revenue goes a lot of that waste goes to, er, waste.

And interest rate rises don't help, nor do high fuel prices for a group that does a lot of transporting. Then again it indexes its waste charges every six months so they get passed on to customers, plus there's a Qantasesque fuel levy.

Thanks to the credit crunch knocking out rival private equity bids Transpacific doesn't have to pay over the tip, oops slip of the keyboard I mean top, for takeovers. Austock suggests rising prices for recycled materials will help offset higher costs.

For its part Transpacific says it's sitting on, if not filling, valuable land and the Tullamarine tip in Melbourne could be worth up to $100 million.

Hmm, maybe they can call it Tulla Tops and sell it to Mirvac. Meanwhile if it doesn't control its appetite for acquisitions, a capital raising must be inevitable.

Advantages

- Defensive

- Can pass on costs

- Recycling potential

- High growth

Disadvantages

- High debt

- Oil prices

- Low dividend

- Acquisition risk

Verdict

- Six brokers call it a buy and two a hold. Its gearing doesn't suit this market so it's strictly long term.