Questor share tip: Shanks shows its nose for making money out of waste As part of the deal, Shanks plans to build a facility to process municipal solid and organic waste into recycled products, solid recovered fuel and biogas for energy generation. It will treat up to 265,000 tonnes of household waste and a small amount of commercial waste from the three councils each year. Shanks also said it was making progress on sealing a waste contract with Wakefield council, which is similar in size to the one announced on Monday and is a joint venture with Babcock. Shares in Shanks are lower than they were at the end of January because of some unsubstantiated bid chatter at that time. There was speculation in the market that a private-equity bidder was circling and this sent the shares soaring. As with the majority of market rumours, it proved to be false. The company had a setback in July last year when Tom Drury, its chief executive, resigned to take a job closer to home. However, it's never a bad thing to have a fresh pair of eyes at the top of the company and his replacement Peter Dilnot is providing just this. After meeting the new head of the company, one analyst said last week: "Whilst affirming his belief in the strategic direction of Shanks, Mr Dilnot believed that there was more to do on delivering operational excellence and continuing to change the culture of the group." Of course, because of the cyclical exposure of the business through its industrial waste operation, Shanks will be vulnerable should the eurozone debt crisis escalate. However, the shares look good value. Historically, they have traded on an earnings multiple of around 18. They are currently on a March 2013 multiple of 12.2 falling to 10.2 in 2014. Some analysts reckon that the company could double earnings per share to around 14p by 2016 as the wider economy recovers and new projects come on stream. The shares were named as a tip of the year at 91p on January 1 and they are up 6pc compared with a FTSE 100 up 2pc. The shares remain a buy for cyclical upside.