Cascade Investment Adds to Large Republic Services Stake Amid Premium Valuation

What happened

Cascade Investment, L.L.C., the investment vehicle associated with Bill Gates, purchased 174,500 shares of Republic Services (NYSE: RSG) on August 12 at an average price of $215.80, totaling roughly $37.7 million, increasing its ownership to 111.48 million shares. This transaction follows a period of moderate stock price appreciation, with RSG closing around $212 at the end of 2025 and trading near $216 in August 2026. The purchase is relatively small compared to Cascade’s existing 35%+ stake and may reflect dollar-cost averaging or portfolio rebalancing rather than a new fundamental signal. Republic’s business remains strong, with Q3 2025 adjusted EBITDA margin of 32.8% and double-digit EPS growth, but the stock’s valuation is stretched at approximately 31 times earnings and 16.7 times EV/EBITDA. Analysts note that the market price is roughly 135% above a conservative free-cash-flow-based discounted cash flow estimate of $90 per share, leaving little margin of safety for new investors.

Implication

For existing holders, Cascade’s continued accumulation offers some reassurance about long-term confidence in the company’s franchise quality, but the size of this purchase—less than 0.2% of its total position—is not a strong enough signal to justify paying today’s premium. New investors should remain cautious: at $215.80, RSG trades at roughly 2.4 times its estimated intrinsic value from a conservative free cash flow model, implying that even modest execution missteps or environmental cost surprises could lead to multiple compression. The company’s resilient cash flows and oligopolistic position provide downside cushion, but the upside from current levels is limited without a meaningful increase in free cash flow growth beyond already optimistic assumptions. A wait-and-see approach remains appropriate: a pullback toward a high-teens to low-20s P/E or evidence that newer sustainability initiatives (polymers, RNG) are accelerating FCF would make the stock more attractive. Until then, the insider buying is a footnote rather than a catalyst.

Thesis delta

The core thesis of WAIT remains unchanged. Cascade Investment’s purchase is a modest vote of confidence from a long-term holder, but it does not address the fundamental valuation gap: RSG still trades at a ~135% premium to conservative DCF value and ~31x earnings. No new information alters the view that the business is high quality but priced for perfection, so the stance stays WAIT pending a better entry point or stronger FCF per share growth.