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TravelCenters of America LLC Message Board

  • granicus007 granicus007 May 20, 2011 5:50 PM Flag

    I loaded up today-here's why

    here's why
    * go back and look at financials for 2008 when fuel prices were falling...TA is going to make a sack full of $ in Q2 as TA's fuel margins will be much higher than the norm...in a similar of 2008 environment TA printed money...
    * rent payments and interest on those payments greatly reduced
    * added 5+ travel centers in Q1, which will be accretive to earnings starting Q2-bargain purchases which in a normalized environment will probably be worth twice what TA paid.
    * TA is not going broke...very little debt and TA now owns over 10 travel centers outright plus several commercial interstate lots - no mortgages
    * the non-fuel sales are approx $1B with very high margins...mouth watering - if the non-fuel sales were separated from fuel, TA's valuation multiples would be substantially higher
    * along with Flying J/Pilot, TA is now part of a duopoly...they are one of two 800 pound gorillas
    * barriers to entry in this retail segment is very high due to the high fixed costs
    * TA has the potential further solidify their duopoly status and leverage their economies of scale
    * I'm not happy with the dilution either - but TA stock is down 25% in one week...way over-sold
    * TA's management is heavily incentivized thru stock options...we are all in the same boat
    I am a long term, value oriented investor and willing to wait. But all the ingredients are all in place for TA stock to be very rewarding..back up the truck boys..

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