Agree with you guys. The market is totally irrational. They're throwing the baby out with the bath water. Patience will pay off but it looks like it's going to take balls of steel to see this through. Good luck to all.
This is from TAL's investor presentation from Q1.....
"Steel prices have rebounded well off recent lows
New container prices should increase when container production volumes return to
normal, assuming improvement in steel prices is sustained
Increased new container prices would lead to higher market leasing rates, less repricing
pressure and increased demand for TAL’s existing containers
Increase in new container prices would also support improvement in used container
Improved utilization and better used container sale prices would have significant upside
leverage for TAL profitability"
Just checked the price of steel and it's come off of it's lows. The price of steel is 225.0 dollars per tonne as of today. It was well below 100 dollars a few weeks ago. If it can stay in that zone it will really help the container disposal prices.
What are you rambling about? They are giving you the dividend despite missing the deadline. You're not owed anything yet they are doing something they didn't have to do. I already voted my shares. Nothing going to stop the merger.
You don't trust it because it's going to take an extra month to finalize the merge AND they decided to give us the dividend despite not making the deadline? What's not to trust. Seems that they did us right. Do what you have to do. I'm playing this long term. The only risk I see in a long term play is if the dividend is not sustainable but I doubt that's the case. They have relatively long term leases. I see that steel prices have rebounded off of their lows from the last month which should help on disposal prices.
Dow futures are down around 70. I wouldn't exactly call that BIG. China recorded some positive data but the Brexit talk still weighs. Some of Asia's markets were closed last week so they're just now able to react to last weeks moves.
I think the container sector as a whole is just getting whipped around by hedge funds. Textainer is down around 20% over the last 3 days or so and they aren't merging with anyone. TAL has faired a little better so far. Still not fun to lose paper money. I bought in with a long term hold mentality which should pay off as long as the dividend continues to be paid. One thing that management mentioned after the Triton merger was announced back in November was that buying back shares saves the company money since they will owe less in dividend payouts with less shares. Makes sense, so for those with shares this should help sustain the dividend.
Take a look at Textainer TGH. They dropped almost 14% today with no news that I can find. These are big swings and I don't know if it's just because both stocks are relatively low volume stocks or what. Steel prices seem to pulled off their lows from earlier in the year but I guess there's doubt regarding China maybe? I don't think todays pullback on TAL has anything to do with the dividend or merger.
I did wind up buying more in the 14.08 range. We bounced off of a new trendline that has formed so lets see how this goes. The Dividend is very good but I guess that's because there are unknown risks with the world economy. Usually TAL trends pretty well with TGH but not today.
I don't understand why TAL seems so volatile with greater than 5% days so often. Textainer seems to be weathering the down market today but TAL's tanking? What gives...
So far they have executed their plan. I was just trying to figure out why the 6% move to the downside when textainer didn't lose much at all.
I really don't understand why the stock moved down so much. At least it was under low volume. I guess there's some uncertainty regarding the merger and until that's done we see volatility. Normally we trade close to Textainer but not today.
The transaction is expected to close on or about June 16, 2016 after the TAL special meeting of stockholders, subject to the approval of the transaction by TAL stockholders and other customary closing conditions.
01cooldud, I appreciate your insight. You've obviously got a good handle on this industry. I bought in big in the sub 9 range and plan on holding long term. Thought about selling in the $17 range only because we got there on low volume but ultimately didn't. I'm fine as long as the dividend remains intact for the foreseeable future. Do you know if any of the two companies have over lapping services? Just wondering if they essentially eliminate some competition by merging.
I feel your pain. I don't even want to look at what I've lost in gains over the last two days. Even though it was all "paper profits" it's not fun to watch it disappear. My only thought is that long term as long as they continue with the dividends we will be rewarded when the container inventory and steel pricing straightens itself out.
I'm hoping China does stabilize here. If the market can be convinced over the next quarter or two that China isn't crashing then we're golden. Does anyone know what the true book value is?