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TravelCenters of America LLC Message Board

  • blueskydriving blueskydriving Dec 7, 2012 11:38 PM Flag

    Comparables ... why is TA so cheap? (part 1)

    Okay, I've read a lot of filings. I'm not saying I'm a TA expert now (or even close to it), but I have a much better understanding of the relationships between RMR, HPT, AIC, and TA. I know that TA says, "We believe that our agreements with HPT, RMR and AIC are on commercially reasonable terms. We also believe that our relationships with HPT, RMR, AIC and their affiliated and related persons and entities benefit us, and, in fact, provide us with competitive advantages in operating and growing our business." Do I believe it? No, not really. There is some pretty sick stuff in there. But, it's mostly related to the acquistion and dispostion of properties. I do see pros and cons but do not feel that these relationships are the reason for the currently depressed share price.

    So, before I offer an additional tiresome diatribe as to why I think TA is trading so cheaply right now, let's look at some comparables to get a better idea of exactly how cheap TA is. Here is a list of comparable low margin businesses that offer fuel, food, and groceries along with just a few metrics ... you may prefer other data points but I offer a few:

    Revenue:
    PTRY $7.5B SUSS $5.7B CASY $6.5B TA $8.0B

    FY 13 EPS:
    PTRY $1.18 SUSS $1.72 CASY $3.01 TA $1.11

    Forward PE:
    PTRY 11 SUSS 20.5 CASY 14.7 TA 3.8

    Shareprice/Bookvalue (Price-to-Book Ratio):
    PTRY $12.98/$14.11 (.92x)
    SUSS $35.26/$18.13 (1.96x)
    CASY $49.82/$14.22 (3.49x)
    TA $4.24/$12.33 (.35x)

    Sentiment: Strong Buy

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    • An update on one of out comparables ... SUSS is switching from the Nasdaq to the big board NYSE ... perhaps TA will clean up their "relationships", switch from the Amex to Nasdaq and trade at 2x book value like SUSS (that would be $24) ... but, not until the "players" hold enough vested TA stock I suppose ... regardless, I'm enjoying the value shopping ... won't last much longer ... glta

      Sentiment: Strong Buy

      • 1 Reply to blueskydriving
      • CORPUS CHRISTI, Texas (AP) -- Shares of Susser Holdings Corp. will begin trading Dec. 21 on the New York Stock Exchange, after the convenience store chain received approval to transfer its listing from the Nasdaq Global Select Market.

        The Corpus Christi, Texas, company said Thursday its shares will be listed under its current ticker symbol, SUSS. Susser said it made the move based on its operating results in recent years, the expansion of its convenience store business and increased institutional participation in its stock.

        Susser runs more than 550 Stripes shops in Texas, New Mexico and Oklahoma, with restaurant service at more than 340 locations. It also is a majority owner in Susser Petroleum Partners LP, which distributes fuel to Stripes stores.

        Susser Petroleum held an initial public offering in September on the New York Stock Exchange, and its shares have climbed more than 10 percent since then to close at $25.23 on Wednesday.

        Shares of Susser Holdings closed at $35.69 on Wednesday, up 58 percent so far this year

    • Good morning ... I'll respond to this post because both of your responses seem to missing REPLY buttons today ... Oh Yahoo, what have you done!?! I just wanted to say thanks for the insight. My question regarding HPT was more related to why they passed on the original purchase of the fire-sale assets rather than let TA acquire them and not so much about the price paid to TA on any properties they may buy from TA. But, I do understand the prioritzation of cash by HPT and the balance of a real estate portfolio ... and, that may be the reason.

      I did not know about the previous lawsuit ... thanks for pointing that out. I'll dig into that at somepoint when things slow down.

      As a REIT, I understand the importance of the lease income to make dividend payments. And, the discounted price wouldn't really have as much of an impact (once properly valued) on HPT's book value as TA's. It may be that the "players" (who own a ton of TA stock) realize that at some point TA will get their fire-sale assets properly valued and that would have a more meaningful impact on their personal wealth. But, the market is perfectly comfortable already trading TA at 35% of book value ... so, clearly something else needs to be done. And, that may be getting off the NYSE MKT (old Amex).

      We will know that the "players" are more serious about getting TA properly valued when they make a move to list it on the Nasdaq. Have they ever mentioned that on a previous conference call? Thanks again ...

      Sentiment: Strong Buy

      • 2 Replies to blueskydriving
      • Blue, here's my take on why TA, and not HPT, purchased the travelcenters.

        I don't have the numbers in front of me, but let's say that TA pays HPT around $200 million in annual rent. TA has had a hard time paying that rent in the past (witness the $150 million deferred rent and the decreased rent from the lawsuit).

        If HPT buys the locations, then it might be able to charge TA another $5 million in rent.

        If TA buys them, then the cash from those operations can be used to pay the HPT rent on the other locations. This makes HPT's rental income (which is all it really cares about) more secure. So HPT passed up the chance to make $5 million (or an 8.5% return on its investment) in order to increase the odds that TA will be able to continue to pay the $200 million in annual rent. Seems smart to me.

        Keep in mind that while TA is showing good EPS, its had negative free cash flow in both 2011 & 2012. For the first 9 months of 2012, TA's cash from operations was $89 million and its capex (excluding the purchase of the new locations) was $111 million. That's negative $22 million in free cash flow.

      • i dont ever recall TA expressing a desire to move to another exchange.

    • Dont look a gift horse in the mouth;;just buy,buy,buy all a poor man can.TICKPARA1111 HAS BEEN BUYING TA UP ALL THE WAY DOWN AT GIFT PRICES!!!!!!!!!!!!!!!!!!!!!! DONT TRY TO FIGURE THIS TA OUT JUST BUY AND BE PATEINT.There is alot of manure post about TA.The fact is this could spike to 6 BUCKS IN A FLASH,AND ALL THE SO SMART ON THIS BOARD WILL MIS-OUT!!!!!!!!!!!! Buy at these low,low prices and tune out the blow hards....................

      Sentiment: Strong Buy

      • 1 Reply to tickpara11111
      • This company has the worst corporate governance structure out there and is not meant to serve shareholders. So many on this board keep on saying buy buy buy and this thing is the best thing since sliced bread yadda yadda, but look at how much money people have lost listening to these board posts.

        Short term, the company "appears" to be profitable, but in the long term, value goes to HPT and an incompetent management team that is in bed with HPT and other parties with conflicts of interests.

        If the PE on this firm looks to good to be true, you can bet it is. Don't get suckered into this scam.

        Sentiment: Strong Sell

    • Why so cheap!! Well, let's begin by saying TA trades on the NYSE MKT (the old AMEX) and all the others trade on Nasdaq. TA has a relatively small market cap ($122 million) and a low shareprice which does not get the attention of institutional investors. TA has two analysts covering the stock and all the others have five or more. Basically, it is not a widely followed equity and gets very little attention

    • Why so cheap!! Well, let's begin by saying TA trades on the NYSE MKT (the old AMEX) and all the others trade on Nasdaq. TA has a relatively small market cap ($122 million) and a low shareprice which does not get the attention of institutional investors. TA has two analysts covering the stock and all the others have five or more. Basically, it is not a widely followed equity and gets very little attention.

    • Why so cheap!! Well, let's begin by saying TA trades on the NYSE MKT (the old AMEX) and all the others trade on Nasdaq. TA has a relatively small market cap ($122 million) and a low shareprice which does not get the attention of institutional investors. TA has two analysts covering the stock and all the others have five or more. Basically, it is not a widely followed equity and gets very little attention.

      Sentiment: Strong Buy

    • Why so cheap!! Well, let's begin by saying TA trades on the NYSE MKT (the old AMEX) and all the others trade on Nasdaq. TA has a relatively small market cap ($122 million) and a low shareprice which does not get the attention of institutional investors. TA has two analysts covering the stock and all the others have five or more. Basically, it is not a widely followed equity and gets very little attention.

    • Why so cheap!! Well, let's begin by saying TA trades on the NYSE MKT (the old AMEX) and all the others trade on Nasdaq. TA has a relatively small market cap ($122 million) and a low shareprice which does not get the attention of institutional investors. TA has two analysts covering the stock and all the others have five or more. Basically, it is not a widely followed equity and gets very little attention.

      Sentiment: Strong Buy

    • Why so cheap!! Well, let's begin by saying TA trades on the NYSE MKT (the old AMEX) and all the others trade on Nasdaq. TA has a relatively small market cap ($122 million) and a low shareprice which does not get the attention of institutional investors. TA has two analysts covering the stock and all the others have five or more. Basically, it is not a widely followed equity and gets very little attention. Another major problem has been the struggling economy which has slammed the entire trucking sector. With all these challenging conditions and a depressed shareprice, the Equity Compensation Plan strategy I've previously discussed at length was just too easy. Wouldn't you do the same thing if you could. I really don't think the Equity Compensation Plan strategy is an ongoing strategy ... it was just too easy with a struggling economy/sector. Why not?

      Sentiment: Strong Buy

    • Now we can look at a thousand different metrics including cash, debt, operating margin, and profit margin. And, I have. I can tell you that there was nothing alarming to me about any of those metrics. Margins are amongst the lowest of the group but not alarmingly so ... and, this was addressed in the last conference call and they are improving with premium brands and services being added.

      So, why is TA so cheap ... Forward PE of 3.8! ... trading at 35% of book value!? At the same Forward PE as PTRY (TA's closest match), TA would have a shareprice of $12.21. If you prefer a Price-to-Book comparison, if TA traded at the same Price-to-Book ratio as PTRY it would have a shareprice of $11.34.

      Why so cheap!! Well, let's begin by saying TA trades on the NYSE MKT (the old AMEX) and all the others trade on Nasdaq. TA has a relatively small market cap ($122 million) and a low shareprice which does not get the attention of institutional investors. TA has two analysts covering the stock and all the others have five or more. Basically, it is not a widely followed equity and gets very little attention. Another major problem has been the struggling economy which has slammed the entire trucking sector. With all these challenging conditions and a depressed shareprice, the Equity Compensation Plan strategy I've previously discussed at length was just too easy. Wouldn't you do the same thing if you could. I really don't think the Equity Compensation Plan strategy is an ongoing strategy ... it was just too easy with a struggling economy/sector. Why not?

      Sentiment: Strong Buy

      • 1 Reply to blueskydriving
      • The economy seems to be turning the corner now and 2013 looks exciting. Even more exciting for TA is the previously announced agreement with Shell to install 200 natural gas fueling lanes on at least 100 TravelCenters will get more headlines next year along with improving operating results as the economy and trucking sector improves. New driver duty limitations mid-year may have favorable impacts as well. The bottom line is TA is significantly undervalued compared to all peers. Very limited downside with significant upside potential in 2013. glta

        I have no idea why I had to break up this message and it took me eight attempts to get it to post, I've about had it with Yahoo!

        Sentiment: Strong Buy

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TA
8.48+0.01(+0.12%)Jul 11 4:02 PMEDT

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