I don't want to give you investment advice but I am holding. The news on CST this morning hopefully sheds light on the discounted value of TA. Arguably, TA is much more than convenience stores with travel centers, truck service, biggest food franchisor, and now QSL. QSL alone could be bigger than current market cap and is so much better than BWLD (there is no comparison). My conversation with IR centered around RMR and why TA is so discounted to peers. The answer received is that RMR actively supports TA when needed and in the past has reduced fees, etc. to align long term TA plan with changing market dynamics. The discounted value relates to the massive capital spend TA has embarked on and results lagging estimates. Capital spend is now winding down and we should see exceedingly good results as these locations "stabilize". Guess that's the big question, are we at the bottom of earnings trough for TA or embarking on an earnings growth phase ala CST, CASY that brings valuation in line with peers. If the latter is true, then this stock can really move.
Suggest all shareholders here do the same. Answered all my question completely. Personally, I think we are at trough and capital program winding down. Should see earnings increase as sites reach full potential.
Any feedback from board on today's announcement? I read it 3 times and my take away that this is really good news. Future dilution is getting reduced significantly- 3.6 warrants are getting taken out per share as opposed to 1 for 1. Also, as of July 8th the share repurchase program has taken out close to 1 million shares and 500,000 warrants. AND there is $14.5M still to go. Analysts should be revising earnings up to reflect 1M shares being taken out, maybe we will see that before 22 July. My personal belief is that they are doing everything right operationally and now on the capital structure side. Once the higher growth kicks in 2017 and beyond, this should respond accordingly by year end as market should be ahead of facts.
Can you discuss why HPT will NEVER sell TA? I have been tracking this stock for quite sometime and have read the articles about the criminal leases HPT puts on TA, but why did this firm want to buy at $14, don't they know that? I think this goes back to $7 if your thesis is true. Shareholder revolt if back to $6.41. Regretting I did not buy down there but can't seem to pull trigger now
Your thesis may be right but the REAL reason ALL refiners are getting killed is China refineries are dumping product on the world market in epic proportions. The writing was on wall this spring when RBOB moved up but refiners did not bounce. I got burned on ALJ really bad trying to play the summer demand but gas and distillate inventories will most likely build through summer. Wednesday will tell us more but that is the sad fact of what has been happening. Now add in the market is down triple digits every day and this stock is toast. Not sure where bottom is but waiting on DK is a suckers game. Even if they do take it out I am convinced it will be for little or no premium.
Really good news in a real bad market. I bought back today at $8.50. Any other market and this stock would have been up ten percent on this news. Every fund tied to this index must now own TACO. They are doing everything right and I am convinced we are in a WMT, MCD, TACO economy for the foreseeable future. TACO will beat numbers as share count has most likely been reduced significantly this quarter. Mr. Levy and friends will coordinate an expedited, expanded growth outlook sometime before 2017 and then this stock becomes a darling. That, of course, is only my thesis but why I bought back today. There was talk of Del coming to Chicago two years ago. That will be announced soon and is also what no one is modeling. GLTA LONGS!!
Per IR website the "founder shares" are available to sell next Thursday, 30 June. There are 3.75 million of them, or 10 percent of float. Besides Levy's who own 2/3, who owns the rest? Also, any opinions on what happens would be appreciated. They were issued for free to founders. Almost seems criminal but that has been put out from beginning. It is interesting the stock went below $12 right before this letter was put out last year as trading above $12 for a certain period would have also let the lockup expire. Plus, add in the fact GS sold all their shares in January as it approached $12 and it seems like no one wanted the shares to be above $12 so lockup would not expire. Not sure what to make of all of this but seems pretty shady. Any insight from board would be appreciated. Disclosure: I am out now but thinking of buying again. Was hurt pretty bad first time but like the company and what they are trying to do.
Posted for conference tomorrow which will be webcast. They seem to be doing everything right and when Platos goes nationwide this fall it can really impact earnings. I get what they are doing, which is building a foundation this year and next before the REAL growth kicks in. Makes sense; brand perception is changing and adding the evening meal option, Platos, will drive sales so that all new units can achieve $1.5M AUV from the start. Wall street is impatient however and shares are on sale. Think earnings will outperform as share count, at this price, is meaningfully reduced at the $25M authorized. Eliminates any/all dilution from warrants which they may be eliminating with this buyback as well.
Cramer believes it's worth betting that Del Taco Restaurants Inc
TACO is going to recover. He also thinks the whole sector is under a lot of pressure and he thinks investors have to be careful with this stock.
I think Levy and company should take it private. Get the growth story going and then do a real IPO. There is a great story here and the brand perception is changing. Stock not reflecting any of it. Take it private and come back at a premium when time is right
With the moves in ALJ and ALDW today the market is now valuing all ALJ assets, other than ALDW stake, at about $170M. Let me remind that this includes the Krotz Springs refinery (77,000 bpd), Altair stake (renewable jet fuel), California refineries with approved rail hub, Krotz Spring wholesale business, entire retail business of 309 stores, and all related logistics assets identified in latest presentation for basis of potential Logistics MLP. PARR just paid $272M for a 18,000 bpd refinery and small logistics asset footprint. SOMETHING HAS TO GIVE HERE!
This should be an indicator that DK will have to offer substantially above current price to complete ALJ acquisition. $272M (includes debt) for a 18,000 bpd refinery and some related logistic assets. ALJ enterprise value which includes debt is ONLY $846M. This includes 81.6% of ALDW, Krotz Springs refinery, Altair renewable investment, retail/wholesale businesses, and Asphalt business which is starting to shine with Highway Bill. BTW, the enterprise value of ALDW is $786M (times 81.6 is $641M) meaning the market is valuing everything except Big Spring refinery (ALDW) at $205M, an extreme discount to what PARR just paid for one 18,000 bpd refinery. This is a market dislocation, plain and simple, which has to correct. Fair value of ALJ is north of $10.
Personally, I think $10 is fair however in this environment probably not going to happen. I think $9 would avoid lawsuits or potential conflict of interest concerns. The quicker they do this the better for both companies. The logistics MLP would definitely help ALJ right here but that seems on hold pending acquisition. For same reason, DK could immediately announce intentions for ALJ logistics assets for DLK like WNR did for NTI log assets. It is clear the analysts want this transaction and would most likely upgrade DK once it executed.
Did anyone else read the 8K they posted this morning? It would appear the change of control provision was triggered on May 31st. Am I reading this right? I assume DK now has control and needs to negotiate a fair price to take out the remaining large shareholders. DK will almost certainly offer stock as part of deal so it is incumbent on them to offer a fair price as these large shareholders will want to be retained by DK after the close. If DK does it right I could see where both stocks rise on the announcement. The combined entity will have a great refining, logistics, wholesale and retail footprint. I plan on keeping my shares.
Good news for ALJ:
Jeff Brorman, vice president, refining, told the Reporter-Telegram in a phone interview that the refinery has been running at its maximum rate since late March.
A planned reformer regeneration and diesel hydrotreater catalyst replacement was made during the first quarter, and Brorman said that such equipment typically has a limited life span and refineries usually replace every 12 to 18 months.
RBOB approaching multi month high today. Can anyone help me understand why this is not more bullish for refiners at this time? As I watched it go from 1.20 to almost 1.70 I thought the refinery stocks would be doing better. Most are still near 52 week lows while RBOB up over 40%.
I think the long term growth story in intact. The last year of underperformance has more to do with wages. The minimum wage increase in CA is the reason it declined primarily. Also, not sure if the new rule passed 2 weeks ago regarding paying salaried workers overtime if they make below 40K affects TACO, but this most recent decline pretty much started right when that was passed. If anyone here can contribute to how that affects TACO, thanks. All wage increases, in theory, get passed along to consumers and all fast food has same pressures, so not sure why TACO seems to get beat so bad with it. Someone here had previously posted TACO is dead money until 2017 when growth starts to ramp up. That may be true and the wage issues seems to have put a downward bias to this stock, unfortunately.
Spoke with IR today and was happy to hear that they share our frustration about the share price. Stated that the recent insider sales were to fill tax obligations which is understandable. Anyway, really added today after speaking today and am hopeful improving cracks, Rin credit from CA operations, and surging asphalt demand will result in better share price. Not even considering DK buyout in investment thesis. Good luck to longs. I own WNR as well.