Updated Version 1 - Aggressive investment firm Jana acquires shares in Casella Waste Systems and calls for reforms

Update on stock price movement

Svea Herbst-Bayliss

Reuters New York, October 20 - Activist investment firm Jana Partners has built a stake in Casella Waste Systems (CWST.O), and hopes the regional waste services company will improve its profit margins and return on invested capital, according to its managing partner and portfolio manager on Tuesday.

This company, headquartered in Rutland, Vermont, has a market value of about $5.6 billion. Its stock price has fallen about 11% this year and has been roughly flat over the past five years, while competitors have performed much better.

“Improving margins and operational execution can drive capital returns, reignite its attractive growth momentum, and unlock Casella's undervalued valuation,” said Jana managing partner and portfolio manager Scott Ostfeld at the 13D Monitor Active-Passive Investor Summit in New York.

Following the news, the stock price surged, closing at $93.07, up nearly 8% on the day.

Ostfeld said Casella's undervalued valuation and its strong position in the Northeast U.S. may make it an ideal target for acquirers.

Casella is one of the few regional solid waste management companies on the public market. Acquiring waste management businesses has long been a favored investment theme for private equity and infrastructure funds—including Blackstone, EQT, Ares, and TPG—as well as major industry buyers such as Waste Management (WM.N) and GFL Environmental.

Ostfeld said the sector is also immune to artificial intelligence risks, adding, “Their AI risk is zero.”

Casella has not yet responded to requests for comment.

This company started fifty years ago with just one garbage truck, but now faces difficulties in improving profit margins and integrating its largest-ever acquisition. In 2023, Casella acquired waste assets in the Mid-Atlantic region from GFL Environmental (GFL.TO) for $525 million.

Ostfeld said, as one of the most active activist investors in the industry, Jana hopes Casella will better align compensation with shareholder value and openly commit to achieving a 27% EBITDA margin by 2029. The company reports a margin of 22.7% for the quarter ended June 30, 2026.

Ostfeld said to improve results and better keep pace with public competitors, Casella should hire a performance improvement consultancy—something Jana previously promoted at chip maker Lamb Weston (LW.N). Lamb Weston has publicly committed to cutting hundreds of millions of dollars in costs.

Jana is one of the most active activist investors in the sector and recently called for payments company Fiserv ((link)) to partner with software provider Palantir to accelerate its own technology transformation plans.

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