I bought 14,000 shares during the recent price crash, but looked at recent volume and decided even the the stock had a good reason to bounce back to $3.40, there was not the volume/ interest to keep the price up. I sold 11,000 shares mostly around $3.30 and expect I may be adding one of these days in the low $2.80s or so. I am keeping an eye on this one, but dont want to hold large numbers of shares with volume so light.
I wonder if the market was disappointed with the comparison to the huge 4th quarter. And the lack of expense control was also an issue.
This looks like a very interesting possible growth story.I found some interesting stuff on seekingalpha, but yahoo's message board is too quiet. The crash in share price from the somewhat disappointing expense control and a glitch that slowed the filing of the 10Q created a great entry point.
TA has chosen to use sale leasebacks with HPT as the source for expansion cash, so while the balance sheet is not levered, the sale leasebacks are increasing rent. I wish they would borrow more and not use the sale leasebacks, but they have not asked my opinion. And fuel margins do not increase based on how high fuel prices are. They oscillate in a range of about 14 cents to 22 cents per gallon, give or take.
So it looks like the delay in filing the 10Q was an embarrassment but in the big picture a non-event. I just got in HLTH stock late yesterday and am feeling very good abot having bought shares on sale.
Very simple. The market recognizes that though not happening overnight, TA can't help but get its performance to book value. If management is below average they should at least be able to accomplish that. Book value equates to $13.90 share price. Even a poor accountant should be able to see this.
It really is humorous how out of nowhere the message board received a huge number of bashing posts from a variety of geniuses yesterday. There was no serious thought put into any of those posts, but it did make for fun reading. Congratulations longs! I have been in EBIX for about 6 years, except for selling after the announcement that EBIX would go private at $20. (And then I re-entered at $9 when the deal was pulled).
Thank-you RR and EBIX.
Yes, earnings were disappointing, and 3/31 may not be much better, but earnings growth in the near term is a solid bet. The current market cap of about $265 mil is equivalent to be able to buy the business component of 252 TA and Petro locations for about $550,000 each plus 204 mostly owned real estate locations for about $550,000 each plus 12 QS&L owner operated locations for about $550,000 each, plus 42 franchised QS&L locations for about $250,000 each.
Almost all the recent posts are about what a disaster the current share price represents, but I predict we will soon look back at the current $6.87 price and wonder why we didnt buy more (or any) sub $7 shares.
Which is exactly what happened Lou. Look at the numbers. The loss was due to admin expenses and rent increasing before the contribution from new locations hitting their "normal" run rate.
Frankly we have similar views. I was very disappointed in the 4th qtr report, and management admitted some strategic errors. It will take a little longer for the profitability to really ramp up, and I dont have great expectations for q1. But q2 could be the turning point.
You are missing the boat - fuel margins may decline, and q1 will not be a great quarter.... But fuel margins are only about 30% of total gross margin. Also - over 120 stores were acquired in the last 4.5 months of 2015, and they are only beginning to contribute to profitability.
While Tom O'Brian may not have been discussing just the 1st quarter, he did say regarding the ramping up c stores:
"These additional contributions will more
than offset the negative fuel margin impacts that I described a moment ago."
That is the more important takeaway imho.
I am disappointed, but longer run this is a fine value stock. Just not today. Was also surprised the QS&L transaction evidently has not yet closed.
My take is that the ownership structure of SUN is very complex, making valuation very difficult, and just making me less comfortable compared with the simplicity of TA. CAPL is simpler but just scary expensive. Market cap is almost $800 Mil according to both Yahoo Finance and Scottrade, while the net debt is about $435 million. So the stock is valued more than double the value of TA, and they have the same amount of net debt give or take a small difference.
But TA had about $38 Mil Ebitda last 9/30, and CAPL just reported and EBITDA was about a third less at about $25 mil. So EV is running about 12 times the $100 Mil EBITDA run rate, while TA is valued at about 5 times its $150 Mil run rate.
In conclusion .... who cares about fundamental value. Kap - Buy that divvy for your mom, but I will make far more owning TA.
Kaptain - You don't need to be a CFO or CPA, just a slob who pumps his own gas to know that gas is about the lowest margin product that any of us buys typically. The gross profit on a gallon of gas will range from 10 cents at the low end to 20 cents at the high end. So low profit margins are one of the basics for this business type. Yet even with its near 50% run in the last month, the stock valuation plus net debt is trading around 5X EBITDA. That kind of value is a rare find for any business with relatively steady cash flow.
One of the great advantages of TA is that Charlie M wont be buying on Monday. TA is too small a company ($350 Mil Market cap) to get attention from BH or any large company.
kaptain - after calling for TA to fall from $6.50 to $2 or $2.25 and then watching TA break into the $9s you just wont quit with your silly comments that show your lack of understanding of this investment. TA has the exact same dividend yield and dividend policy as Berskshire Hathaway. TA had zero C-stores 2 years ago and now has almost 200. This very rapid growth consumes capital. At some point TA should pay dividends but that is at least a year off. Its called appropriate financial management Mr. CFO.
TA is producing nice GAAP earnings (though I mostly look at EBITDA). TA at $9 still represents a tremendous value.
This new article at The Street rambles, talking about possible IPOs, then talks about what an interesting value play TA is. It is also interesting thinking about how TA can make Quaker Steak flourish. It is obvious that TA can operate the brand at a fraction of the admin & management cost of QS&L operating as an independent company. We will soon know more.
Mr Bean Counter - I generally have great respect for CPAs. But there are exceptions. If I bump into a CPA who is arrogant and who does not know the limits of his (or her) skills, then that would be a bean counter who is nothing more than a bean counter, who would not have my respect.
You are sure almost all of the investors on this board lack a college degree? Why would you post such an ignorant statement? I don't know how many have college degrees. My guess is most of the posters on this board do have such an education. I have a BA and an MBA. I also have earned the designations CBA (Certified Business Appraiser), CVA (Certified Valuation Analyst), MRICS (Member of the Royal Institution of Chartered Surveyors), and I am licensed as a Certified General Real Estate Appraiser in New York. I have to complete at least 30 hours of Continuing Professional Education each year to maintain my license and designations. By the way, about 90% of CVAs are also CPAs.
A bean counter should look at TA's income statement and balance sheet and see that the sum of the funded debt less cash on hand is about $400 million as of 9/30, while market cap is still low at about $325 mil, making the Enterprise Value just $725 Mil. Core EBITDA is tracking at about $150 mil, making the EV multiplier about 4.8X at the current stock price. Even a novice bean counter can recognize that value proposition, yet the bean counter on this board projected the price falling from the $6s into the $2s. Instead it moved to the mid $8s, but is still wildly cheap. Good analysis Kaptain!