It's a goofy scared market. There are a number of risky ways to get 14%+ yeild today. TAXI has the advantage of being simple and solid. If I could have gotten any more shares under $5 after the report I would have. Now I am just pleased to be solidly in the black. The stock is well worth $7. I don't think it can get back over $10 without an opperating earnings inflection (or $40M SCAC). According to my info next Q estimate is 0.18 and there are no more further out. Previously the full year was estimated to be flat with last year -which maintains the dividend. They have the cash and the spreads to do even better but it needs to show in earnings to get to a fair value.
At today's price, TAXI is still yielding almost 11%. I think people in the market have accepted that recovery may take till next year. Being able to park your money at over 10% in a safe investment while you wait for capital gains is a good deal even in a strong market. Beats the hell out of 1% or less in T-bills.
The big banks have reported modest profit in the first two months of 2009. I think TAXI may have charged down everything it could in the 4th qtr. The interest income was $.25 per share but operation income was only $.16 per share. There was a lot of write down on investment assets. That will not likely occur again in the 1st qtr. I believe write downs are as big as they will get.
There is only 1 or maybe 2 analysts that watch TAXI. $.18 for 1st qtr earnings may be low. If the write downs aren't as large we could see over $.20 easily.
And, there is the "big green elephant" in the middle of the room that no one is talking about. The SPAC investment could generate a HUGE shot to TAXI's NAV -- probably sooner than later. It has to happen before the end of the year or the deal goes sour. No way TAXI managment will let this deal get away.
No matter what happens to share price over the next few months, you are buying into a 12% APY dividend. Actually more because the next dividend (1st qtr) will be paid two months from now not three (Paid sometime in late May). There is no toxic debt at all in this company and the interest spread is well over 4%.
Whenever a financial market recovery does happen, there will certainly be a significant capital gain in the share price of TAXI. In the meantime you get 12% return on your money.
The honest book value of this company is $10 per share. There is no over valuation of assets and all but a small percentage of assets are valued near liquidation value.
There is no reason to believe that TAXI will be unable or unwilling to continue the $.19 per qtr dividend. They historically pay over 85% of earnings out as a dividend. They are an RIC which means no (or almost no) double taxation.
I hate the concept of taxi drivers being enslaved with ridiculously expensive medallions but I can't argue with the success of this company. They have carved out a very profitable niche by accepting medallions as collateral.