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TravelCenters of America LLC Message Board

  • granicus007 granicus007 Nov 12, 2012 3:10 PM Flag

    CapEx run rates

    during the 9 mos ytd 2012, TA spent $94.2 mm on improvements to existing travel centers & $17.4,, on the newly acquired centers (some purchased in 2011, some in 2012) for a TOTAL of $111,600,000.00 Huge amount of $$$ for a company with a market cap of about $130mm!!!!
    I have to assume this level of capex will NOT continue.
    To put this into context, if TA had a normalized run-rate of $60mm annual for capex, that would have left a conservative $40mm left. $40,000,000/28mm shares = $1.428/share .
    While there is always a need for capex, the capex for the y-t-d- is historically very high (replacing high-speed fuel dispensers along with diesel exhaust fluid pumps + upfitting all the newly acquired sites).
    Capex will go down. And when capex goes down significantly, as we should expect, there is more income. And it seems like in TA's case there is the potential, once capex is reduced to a more normal level, for much higher INCOME.
    ps and let's not forget TA has substantial net operating loss carry-forwards to offset income taxes.

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    • if you listened to the conference call obrian said same cap ex for 2013 as 2012.

    • Capex itself doesn't hit the income statement. The only affect lower capex would have on the income statement is a slightly lower depreciation expense.

    • Theoretically, the Cap EX adds to value. It should increase earnings and potential earnings.

      • 2 Replies to mike2915
      • If that's the case, then where's the beef?

      • "Theoretically," they are doing the cap ex. so that they can sell the #$%$ to HPT, make HPT happy and then earn poor returns on the things they built. That's been the story on this company, and continues to be the major indictment of O'Brien & Co. They only care about SIZE of TA, not shareholder value. They basically have been corruptly (in my opinion) empowered, to grow TA for growth's sake, because that's what makes Barry and HPT happy. They can use the #$%$ of the "business judgement rule" to pretend that everything they are doing is for us....but the fact of the matter is, they still, to this day, can't justify the sale of 10 million shares at $5.69 1 1/2 years ago.....and they've never tried to document that.

        They want to be the biggest, because it helps them "reward" HPT. And, as long as they are at least profitable, that's all they care about. Even if they dilute us to kingdom come.

        They've NEVER adequately defended their integrity on these issues. They a#$%$olutely do not have any, in my book. They're paid through the nose to be servile to Portnoy and HPT. That's just the way it is.

        That having been said, it's worth more than $4.50, that's for sure. I think, as I said before, that, all things considered, $6-7 is more like it, right now. And I think we'll see that by the first quarter of next year, probably...and probably $5.00-5.35 again by January...or maybe even December.

        Sentiment: Buy

 
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