I believe CAI is worth about $18 to $22 based on fundamentals. I've studied the quarterly financials closely, and made some projections looking into the future. Unfortunately fundamentals don't seem to apply much here - stock price is driven by equity mutual fund and ETF inflows/outflows, and perceptions about the transportation sector. What people don't realize is that when the shipping lines are hurting, they are more likely to lease containers than to buy, helping firms like CAI, Textainer and TAL. Most of their new business was on long term deals ranging from 5 to 8 years, so those boxes aren't coming back any time soon. Container demand is likely to be slowing, but sales prices are at record highs. With industry utilization at 98%, supply for used containers will be short for a long time. The biggest risk to CAI is either the bankruptcy of a major customer, or a major market downturn such that utilization drops dramatically. However, because container prices have risen so much in the past 2 years, and per diems have gone up proportionally, customers are hesitant to return containers knowing they'll have to pay a lot more when they pick up again after the slow down. I think CAI is going to see relatively stable income over the next couple years, and may even declare a dividend eventually. However, the former CEO holds about 2 million shares and has been divesting, though he appears to have stopped when the price went under $20. His long-term divestiture plans may dampen stock price somewhat. Still, I think this is a good stock. In the spirit of full disclosure, I do own some, and plan to hold it for 2 to 3 years at least.
I don't get why these container stocks have such a low pe. Once the double dip fear is over these stocks will start to climb. I think your price target is too low. I am looking for 25-30. The cc was very optimistic.