there is a reason PM has lagged MO and a reason MO spun it off. PM has all the lawsuits hanging over its head now and the anti-smoker backlash is just starting. MO is better off buying another alcohol company. How about Sam Adams?
shorts have increased to 3.3M shares. That is the reason for the share price decline. Plain and simple. Take out the shorts, and the stock is probably still $12+.
Good luck covering.
Earnings at Medallion Bank decline in 2Q. Net income at Medallion Bank was $4.3 million in 2Q, down from $6.7 million in 1Q. the earnings at the bank were lower for three reasons. First, the tax rate was abnormally high, which we ￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼￼think is attributable to a recent change in the NY State tax code causing a one-time tax hit. We saw similar tax rate impacts at some other banks we follow that do business in NYC. Second, expenses were higher than we expected. We will hope to see more clarity on this in the Q. Third, the provision at the bank was higher than expected, which is likely due to the higher than expected consumer loan growth. Recall that the consumer loan segment carries the highest reserve rate of the three loan segments. Thus, we are not sure how much of the banks lower earnings in 2Q could be considered non-core, but we should get more clarity from the 10-Q.
Delinquencies and losses on medallion loans has been the crux of the short thesis on Medallion, and we think the failure for losses to materialize will continue to squeeze shorts out of the stock. Recall that Medallion owns 159 medallions in Chicago. During the second quarter, the company wrote the carrying value of these medallions down by $4.6 million, which was expected. The carrying value of these medallions is now $248k each, which compares to recent transfers in Chicago at $250k.
Our 12-month price target is $15.
We thought the quarterly results were again good. Loan growth was completely attributable to the consumer loan portfolio, as we had expected. The medallion portfolio continues to perform very well. Total loans 90 days past due on a managed basis were only 1% of loans, which is up from 1Q15, but still seems quite within the range of NPLs at a bank. Medallion earned an ROE of 11.7%, TBV grew by 11c to $11.06, the company maintained its quarterly dividend at 25c (11.8% yield), and it increased its share buyback authorization (by $13.5 million, to $26 million). Lastly, and importantly, while the company missed our projection for operating EPS, most of the miss seems to be from higher provisioning related to stronger loan growth, and not from losses or problems in the medallion lending business.
Results reinforce BUY rating. The quarterly results again demonstrated the disconnect that has emerged between the short thesis on the stock (ride sharing aps will hurt the taxicab industry, and TAXI has exposure) and Medallion's actual business model and earnings power. The fact is that even with medallion values having declined, earnings have not been affected. Furthermore, the majority of TAXI's earnings now come from non-taxi related loan products (~64% of earnings in 2Q15 came from the consumer business), and both the taxi related and non-taxi related products are performing strongly. TAXI has short interest of roughly 3.3 million shares, which is 13.5% of its shares and about 13 days of trading volume. We think that as the company continues to pay its dividend and buy back shares, the short interest will squeeze out.
From their website:
No Trading During Black-Out Periods. Covered Persons are subject to a black-out period during which they are prohibited from conducting any transaction involving the purchase or sale of the Company’s securities. The black-out period typically begins at the close of the market on the fourteenth (14th) day prior to the close of any fiscal quarter and ends at the open of the market on the third Trading Day following the release of the Company’s quarterly or annual financial results for that particular quarter (the “Black-Out Period”). The Chief Compliance Officer will send out e-mails alerting the Company’s directors, officers and employees to the start and the end of each Black-Out Period. The prohibition against trading during the Black-Out Period also prohibits the fulfillment of “limit orders” by any broker for such Covered Person, and the brokers with whom any such “limit order” is placed must be informed of such prohibition at the time such “limit order” is placed.
says the man of the "consent decree"
For arguments sake, if you are right and everyone else is wrong, where is TAXI getting all this cash to pay $25M/yr in dividends and millions more in buybacks? You can't fudge cash
multiple activists now involved. I expect executive clawbacks and lawsuits. Ned might even do jail time. Jagid will have pay clawed back as well.
The jig is up folks
IDSY folks make too much money. Everyone needs to take pay cuts. Sorry folks; it's dire.
Execs should take 25% pay cuts. Norm should agree to work 100% on commission as his plan has doomed the company