Name me a high growth name that pays dividends. Normally an owner of truck stops and c stores would not be a growth story. But the explosion into the c store space does show a high growth strategy.
I searched for recent info on insider buys at PSEC and could not find what you have "reported" here. Please give your source. I am skeptical particularly as these buys if true would be massive for any stock.
Even safer are the notes. RFT closed at $14.77, pays a 7.625% coupon on a $25 par value. These notes mature 2024. The 7.125% notes (RFTA) are $18.97, and are more expensive because it is only 3.5 years till they come due at $25.
That is impressive. I got out of PSEC a while back mostly because of the dastardly deeds of CEO Barry. Where do you think he got that $42 million? The number of shares outstanding has exploded as PSEC sold shares even below book value to feed Barry's need for growth in management fees.
But I have been thinking about getting back in. The share price is now crazy low, and PSEC's management are some brilliant people. Just don't forget that they are amongst the most self-serving. But everyone once in a while, shareholder interests and Barry's interest may become aligned.
Yes TA serves the trucking industry, but the general public also uses their 250+ truck stops. And TA has purchased almost 200 c stores over the past 2 years that are just beginning to contribute to profits. The crash in TA 's share price is just crazy. Even if truck traffic is off a bit, I project an earnings blowout.
smallercap - When a company is in hyper growth mode it uses its cash flow to fund growth. Adding almost 200 c-stores as well as growing the truck stop business represents a level of growth you wont find many places. (And now TA also owns a casual dining brand bought for a song). I was not thrilled with the latest sale leaseback as a source of growth capital, and you are correct that the relationship with HPT does complicate things. But the prospects of TA st0ck is not diminished by any of this. TA will double over the next 12 months, IMHO.
You are correct - I did not value assets per store when I was getting my MBA. But when I use my CBA (Certified Business Appraiser) or my license as a Certified General Real Estate Appraiser, I am looking at a single C-store or a small portfolio of C-stores often. So, based on the low amount of debt plus the cheap market cap, TA is cheap on a per store basis. Its called the fundamentals sfvip. And by the way, I believe TA owns the real estate fee simple for almost all of the near 200 C-stores, while they also own a leasehold interest in the truck stops, which is considered real estate ownership of a different kind.
DF - I am disappointed that management allowed the stock price to slip they way they did, and yes you are right, as the yield got crazy, the divy cut became the thing to do. RAS has been a big loser for me. Long run I think it comes back. I guess one conclusion is that the market always has new lessons to teach. And I appreciate you continuing to speak when the mob has been wanting to hang you.
At $360 Million market cap that is roughly equivalent to $1 Million per travel center (with slightly over 250 centers) plus $500,000 per C store (with about 191 stores). Wow that is cheap.
I guess I can't blame you for wishing for an even better buying opportunity, but TA's stock price will be dictated by its free cash flow. So the long term direction is not in doubt imho.
David's greatest sin is that he let fundamentals guide him. He did not account for the sometimes crazy view of things by the market. In the long run though, fundamentals will prevail.
A few pennies of the CAD (I forget exactly) was from capital gains on the sale of a property or two. That kind of CAD is not sustainable, and I think that has something to do with the decline. But overall, CAD from recurring cash flow is strong enough to support $0.18/ quarter, so the recent selling is not very logical to me. I bought a couple days ago and will probably buy more.
I would be surprised if senior debt is available at 5X EBITDA. 4X is much more likely as a limit. To get to 5X or a bit higher probably is possible with some mezzanine debt or unsecured notes mixed in.
sfvip - I added today too. When I saw the news later, I was tickled. I am familiar with the Quaker Steak & Lube brand, and I have always thought it was a pretty cool casual restaurant. When they rebrand some of their diners I think it will pay immediate dividends. And for TA to go out and buy a restaurant concept is a wow moment.
I said it before. TA is crazy cheap. Just hold on for a couple more quarters, and cash flow will build.
Good luck longs.
happytrader- In the conference call they noted that the mostly pump diesel, and that diesel margins were unusually tight this past quarter. I dont know if that should be a concern, but gas margins are only a small part of the answer. They also said that diversifying into regular c stores was a way of diversifying the risk on fuel margins to both gas and diesel.