And The Winner Is...
The Showdown Of Our Mini-Series
Ladies and gentlemen, welcome to the final showdown. After weeks of research, discussions, and some serious back-and-forths, we’ve narrowed our focus to two sectors that have caught our attention: Environmental & Waste Services and Healthcare Support Services. Each has its own unique strengths, challenges, and long-term potential. But we can only deep dive into one.
To make the call, we—Cas & Milan—will take on the roles of judge, jury, and executioner. We’ll break down both sectors from every angle: their upside, their risks, and whether they offer the kind of opportunities we’re looking for. No hype, no fluff—just a sharp, honest evaluation before we make our final decision.
If you’ve missed the previous parts of this series, you can find them here:
Also don’t miss out on our extra part of this series!
Before we dive in, I, Milan, want to quickly share something. I consider both sectors to be strong enough, both qualitatively and quantitatively, to invest in. My personal opinion on this will not be extensively discussed in this article; you can find that in the two sector deep dives. To avoid repetition and overlap with Cas, my contribution will focus on weighing the two sectors against each other, highlighting where one surpasses the other and vice versa, also from a practical investor's perspective. This will be more based on my subjective opinion and intuition rather than hard facts.
Now, let’s kick things off with the pros of Environmental & Waste Services. What makes this sector worth a closer look?
Environmental & Waste Services - Pro
Cas
For me, the strengths of this sector can be grouped into three key categories:
Technological Potential
Future-Proofness
Simplicity
Let me elaborate.
First, technological potential. Based on what I see here in Belgium, this sector is overdue for a tech upgrade. Collection routes and schedules are still determined using outdated methods, following rigid routines without real-time optimization. AI and big data could change this dramatically. Sensors and analytics could optimize collection routes and timing, while AI-driven automation could revolutionize recycling by improving waste sorting and processing efficiency.
Second, future-proofness. Waste-related services will always be necessary. They may evolve, but as long as we live in a physical world (which I certainly hope we continue to do), some form of waste management—whether collection, recycling, or remediation—will remain essential. This sector spans multiple subsectors, all of which contribute to a more sustainable future.
Finally, simplicity. Just because I mentioned AI earlier doesn’t mean this is suddenly a flashy, high-tech industry. Far from it. The core value drivers here are still the fundamental waste management processes. AI and big data are merely tools to enhance efficiency, not the foundation of the industry. And that’s what makes it interesting. Waste collection and recycling are easy to understand—so much so that they seem boring. And boring is perfect. Most investors overlook this space because “I’ve invested in waste collection” doesn’t sound nearly as exciting as “I’ve invested in the future of AI.” That leaves room for opportunities. Plus, as mentioned in the previous article, there’s little ETF exposure here, which means fewer passive investors and less artificial price inflation.
As a bonus, this sector isn’t just financially promising—it’s morally compelling. If the economic fundamentals align and the right buying opportunity arises, investing in waste management is also an investment in a more sustainable future. That aside, I’d love to dig deeper into this sector. Maybe, just maybe, we’ll find a diamond buried beneath the trash.
Milan
One major advantage of the Environmental & Waste Services sector, in my view, is that it tends to be less vulnerable to disruptive innovations compared to the Healthcare Support Services sector. I suspect AI will have a more transformative impact on healthcare. Additionally, the high capital requirements in Environmental & Waste Services create barriers for new entrants, offering more stability for established companies.
I also find Environmental & Waste Services particularly suitable for holding individual stocks. I have noticed that my broker does not offer a sector-specific ETF for this industry, making stock selection a more attractive option. In contrast, Healthcare Support Services provides multiple ETF options, making it easier to gain diversified exposure.
Environmental & Waste Services - Contra
Cas
When it comes to the downsides, I can be brief. My biggest concern is the high capital requirements for technological implementations. This sector is already capital-intensive due to the massive infrastructure needed. Financially, the fixed costs are significant, leaving little room for error. The predictability—the so-called "boringness"—comes at a steep price. Add in the costs of automation and data analysis, and there’s almost no buffer for bad years. These investments also take time to pay off, requiring patience. That said, I believe in the potential of technology to enhance the sector’s core processes, so while caution and close monitoring are necessary, this isn’t a dealbreaker for me.
Another challenge is the shifting perspective on waste management. We’re gradually transitioning toward a circular economy—one where waste production is minimized. Slowly, yes, but surely. That said, direct waste management expenses are still projected to exceed $600 billion annually by 2050, so there’s no immediate concern. Even in a world with less waste, services like recycling, purification (air, water, land), and remediation will remain essential—perhaps even more so.
My final struggle? Choosing the right investment within this sector. It’s tough to pinpoint a specific subsector, let alone a single company. But calling "too many choices" an investment problem feels lazy—so I’ll take the blame on that one. I guess I’ll have to make up my mind after a deeper dive into the numbers. If this sector turns out to be the winner, that is.
Milan
The biggest problem I see of the Environmental & Waste Services sector is the challenge of identifying companies with strong long-term growth potential. The waste management and environmental services industry is highly regulated and generally stable, but it offers fewer high-growth opportunities. That’s not to say opportunities don’t exist, but they are harder to find and often concentrated in regions with weaker waste infrastructure, such as Africa, South America, and Asia. These markets come with higher risks to us, particularly due to our limited knowledge of their regulatory environments, making stock selection more challenging, although not impossible.
Healthcare Support Services - Pro
Cas
Healthcare Support Services (HSS) is a fascinating sector because the very subject of its processes—patients—also happens to be the end-customer. This unique dynamic carries significant implications, which we’ll explore further. But first, let’s highlight the sector’s biggest advantage: people are living longer, and they require extended healthcare. As Milan already pointed out, an aging population is the primary growth driver for this industry. On top of that, no one enjoys being in a hospital, which is why subsectors like health devices and telehealth are set for substantial growth.
Another major plus is that this industry is already in the midst of a transformation. IT systems are being integrated and proving their worth, providing solid business cases that can be replicated across facilities. Implementing AI and data analytics in one hospital is essentially the same as in another, meaning the transition should only accelerate as more success stories emerge. But beyond just supporting operations, IT can become a primary value driver in the HSS sector. Technologies like AI-powered anomaly detection and health-tracking devices don’t just optimize processes—they create entirely new ways to deliver value through big-data analysis. And because this approach is inherently scalable, its impact will only grow in the future.
Lastly, HSS benefits from strong government backing, as keeping people healthy (or at least healthy enough to pay taxes) is a political priority. Depending on the country, healthcare services receive significant public funding, highlighting their importance in society. A great example is the widespread availability of employer-sponsored health insurance as a benefit-in-kind, reinforcing how deeply integrated this sector is within public policy.
Milan
What excites me most about investing in this sector is its vast potential. I’ve been deeply inspired by the works of Yuval Noah Harari, especially Homo Deus, where he discusses how one of humanity’s long-term ambitions is the pursuit of immortality. And honestly, I couldn’t agree more. Who wouldn’t want to extend their lifespan—especially if they can stay in good mental and physical health?
That’s why I see healthcare as a sector that will always thrive in research and investment. Right now, the focus is on battling diseases like cancer and viruses, but I believe a time will come when we’ve conquered many of these threats. When that happens, the spotlight will likely shift toward enhancing Homo sapiens—perhaps even evolving into Homo Deus. With the backing of capital and AI, these ambitions make healthcare, in my opinion, one of the most exciting industries for the future.
It's not just the future that excites me, the value creation we’re already witnessing today is truly impressive. No other sector from our selection in Part II even came close to the level of value being generated here—the gap with the runner-up was staggering.
Anyone familiar with the fundamentals of investing knows that everything starts with value creation. And if there’s one sector where that is most evident, it’s this one.
Healthcare Support Services - Contra
Cas
Honestly, HSS feels overwhelmingly complex to me. It involves thousands of intertwined support processes—insurance claims, patient follow-ups, billing, and more—creating a tangled web of operations. On top of that, the real value-driving aspects, like anomaly detection and surgical advancements, are outside my expertise. Everyone says “AI and big data will revolutionize this sector,” but if you asked me to explain exactly how, I’d probably struggle.
Then there’s compliance—an unavoidable headache. Since HSS deals directly with people, it has to adhere to strict regulations like GDPR and HIPAA. Unlike my trashcan, which has no privacy concerns, patient data demands careful handling. These regulations bring significant costs—not just in the initial setup (ensuring data is properly reported) but also in ongoing maintenance (adapting as regulations evolve). The problem? Regulatory uncertainty itself is a moving target, adding another layer of complexity for businesses in this sector.
Another major issue is high turnover rates. The healthcare industry has been vocal about staffing shortages, and it’s not just doctors and nurses—even support personnel, like IT specialists needed to implement and maintain data systems, are in short supply. This compounds the compliance and operational risks.
And then there’s government dependency—both a blessing and a curse. Since the Trump administration, the focus in the U.S. has been on budget cuts rather than expansion. If funding dries up, planned support system upgrades could be delayed indefinitely, as survival takes precedence over long-term improvements.
Ironically, one of HSS’s big priorities is waste management—not just metaphorically, but literally. The industry generates large amounts of specialized waste that require strict handling protocols. Finding sustainable solutions is becoming a key focus, which, funnily enough, ties back to the advantages of our previous sector.
Milan
My biggest concern with this sector is myself. As an investor, it's crucial to understand your circle of competence, and I have to admit that my medical knowledge is lacking. While this may be less critical than in biotech companies, a certain level of foundational knowledge is still necessary if you want to engage in stock picking within this sector. I suspect I would grasp business models in the Environmental & Waste Services sector more quickly than in this one.
Moreover, I believe this sector will face ethical dilemmas in the future. Will we grant AI access to all our medical records? Will we allow companies to make billions in profits instead of ensuring that healthcare becomes more affordable for everyone? These are just two examples of the issues we will likely have to address in the coming years. And rightfully so—these are complex topics that deserve attention, and our stance on them could significantly influence our investment thesis.
Final Verdict
After weeks of research, debate, and deep dives, it’s time to make the call. Both Environmental & Waste Services and Healthcare Support Services present strong investment cases, each with its own strengths and challenges. But in the end, only one can take the crown.
Healthcare Support Services is undeniably a high-growth industry, backed by an aging population, AI-driven advancements, and strong government support. The sector is a hotbed of innovation and value creation, with big data, automation, and telehealth reshaping how healthcare operates. But it’s also highly complex, deeply regulated, and politically volatile. The industry’s heavy dependence on shifting policies and ethical dilemmas surrounding AI and data privacy make it a difficult landscape to navigate.
Meanwhile, Environmental & Waste Services presents a simpler, yet incredibly resilient investment opportunity. Waste management is a necessity, immune to economic downturns and untouched by rapid, unpredictable disruptions. The sector is evolving, with AI-driven logistics, smarter recycling technologies, and sustainability initiatives bringing new growth potential. It’s also underappreciated—lacking ETF exposure and heavy passive investment, meaning opportunities remain for those willing to dig deeper.
And the Winner Is…
Environmental & Waste Services.
So, after all the debate, we’ve made our choice: Environmental & Waste Services wins.
Now, it’s time for the next step. On Wednesday, we’ll reveal the company we believe has the best potential in this sector. Stay tuned—because as it turns out, there’s gold in the garbage.
📢 What do you think? Did we make the right call by choosing Environmental & Waste Services over Healthcare Support Services? Drop your thoughts in the comments—we’d love to hear your take! 👇
🔔 Don’t miss out! This Wednesday, we’ll reveal the one company we believe has the best potential in this sector.
Please note: This article includes a disclaimer regarding investment advice.
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