Maybe inventory write off and tax credit denouncement was part of cleaning up the books for a buyout. I hope do since they don't look much like a continuing business.
I doubt $4 unless their new businesses drag their earnings down. I expect their travel center business to make at least a $1.00 per share. Let's say they only do 80 cents then $4 would be a PE of 5. Even TA deserves a projected future PE higher than 5.
TA is a growth company so their equity goes into expanding not staying the same and paying a dividend. They did a major dilution to help them grow. In my opinion it hurt sharrholders.. I would have preferred to own a higher percentage of the old business instead of a smaller percentage of the new larger company. The dilution significantly lowered the book value per share and the potential profit per share. Maybe in the long run after they work through their expansion cost their growth will pay off but for the last few years the dilution and expansion has not been good for the shareholders.
I think their margins on new business are not high enough to be profitable. I don't know how much of their development cost goes into cost of goods sold but I don't think more of the same type of business will make them money. The hope has to be that their new business leads to some new much higher margin business or that they can get some totally new type of business that has much better margins. The big issue is that so far they have not shown the ability to get profitable business. Maybe the industry is too competitive and unless they come up with something superior to the competition, they won't be able to make a profit.
I think if it breaks below 50 cents it could drop a lot more. Maybe not back into the 30s but it wouldn't surprise me if we see mid to low 40s. Most people here are blinded by their perceived potential instead of acknowledging how bad they are performing. The stock price took a huge jump when they announced big future increases in sales but it turns out they lose money on those new sales. Luckily they sold shares before people realized that their losses were going to get worse with more business.
Reducing their marketing and advertising expenses will help but to survive they must be able to get better margins.
$5 million less spending is not the same #$%$ million after tax profits. If they can't improve on their margins there won't be any profits. Even if they can actually reduce overhead spending by $5 million that won't near offset the $7.7 million after tax tax credit they took last March. Think what their loss would have been this year without that $7.7 million tax credit.
$5 million cost reduction is not the same #$%$ million after tax profit. Their margins killed them and $5 million reduction in cost won't make them profitable. Their tax credit is what made them profitable this year. They need to streamline the company and then sell it. Unless they get some great new product I don't see them surviving as an independent company.
A while back they booked a huge tax credit based on expected future profits. The tax credit is the only reason they are showing a positive P/E. If they didn't do good this quarter maybe they will have to undo the tax credit and not be a profitable company.
I also expect their older business to do better than expectations but who knows how bad their overhead cost will be from acquiring their new businesses. I won't be surprised if they end up doing well with their convenience store business and new restaurant business but they probably will start out with some large overhead cost.
Their margins should be ok this Dec. quarter but they are going to compare against last year's Dec. quarter that had an abnormally high profit. I can't remember why last year's Dec.'s profits were so high but it wasn't something that they can continue to do. Typically they don't do well in the winter, so current earnings estimates are not really bad it's just that last year's unmatchable numbers make them look bad.
Their truck stop profitability changes based on their fuel margin per gallon not their fuel revenue. Normally they achieve better fuel margins when fuel prices are dropping. Not sure why TA price continues to drop. Maybe due to the declining stock market or maybe the uncertainty concerning their new businesses.
They now estimate they will do 600 bitcoins in the first quarter. That is less than what 8 new machines are suppose to be able to do. Their 2016 projections are based on 500 new machines running most of the year.
Seems like the drop is overdone but I also thought that when it dropped into the $7s. Fighting the temptation to start buying. Probably best to wait until the selling is done.
I also expect the Dec. quarter to beat forecast. Checking back I had forgotten that the Dec. 2014 quarter was so fantastic. Even if the Dec. 2015 quarter beats forecast by a good bit it will still look very bad compared to Dec. 2014. I know it is in the forecast but who knows how the market will react with the bad quarterly comparison and a big negative change in P/E.